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FINAL REPORT 

OF 

UNITED STATES 
LIQUIDATION COMMISSION 

WAR DEPARTMENT 



BY 
EDWIN B. PARKER, Chairman 




WASHINGTON 
GOVERNMENT PRINTING OFFICE 

1920 



n. «f B. 

luL ?i (920 



ly 



\9 



^ 






I. Sales 

II. SHirlHin«'iit> 



CONTENTS. 



A. FINAL REPORT. 



B. BRIEF REVIEW. 



Page. 
5 
6 



I. OryauizMtioii aiid I'uiKiitui.s 
II. Sales 



^j 

-If 

Sales to the Republic t>f France ~~~ Ig 

Sales for "Liberated Nations'' 

Oift to Ked Cross 



2S 

30 

< niercial sales of property located in France 31 

^5(•I^'ian .sales and j;eneral settlement -^^ 

Sales in (Jernianv '.,', 

' ~ ,i-f 

."^ales in Lnpland _ ^f. 

Summary of sales "~~ ,^y 

III. Settlements of claims — --— 

Sottlenieiirs with (Jreat Urirain ~ ~ 4., 

r.rirish artillery and annuunition .settlement 43 

Australian wool settlement _ 4:5 

The ("uthell settlement 4— 

St'irlemeiit of tank agreements _ _ 40 

I'.ritish Liberty motor settlement r.> 

r.ritish interest claim -.> 

l.iquid.-'tinn of nitrate jiool _ __ -^ 

Kills, acc.iunts. jind .laiins lu-ndiiiL' in Great Britain r,(j 

Excess rosts claim -^ 

Overhead expense claim -q 

Suppiomeiiral chiim for railway rranspdrtation 59 

Contract claims of nationals ___!'_ m 

Sottlemcnts with France "~ 61 

French artillery and ammunition settlement 01 

French aircraft .settlement " (j3 

Liberty motor settlement g5 

French transportation .settlement q<5 

French port dues .settlement " 70 

General settlement with the French Government 

Indemnitication of America by France against nil claims of 
nationals for torts, workmen's compensation, rents, requi- 
sitions, and damages ~_f 

Summary _ ,-« 

General settlement with Belgium ~~~"~ -^ 

General settlement with Italy ~ _^ _ ^^ 

Negotiations for settlement with Luxembourg _ gi 

IV. Conclusion __ - -- _ . 

3 



<_ 



FINAL REPORT OF THE UNITED STATES LIQUIDATION COMMISSION- 
WAR DEPARTMENT. 



To the lionorable the Sjxuktauy (ik War: 

The T'niteil States Liijuidation Commission — "War Department 
Avas created February 11. WV-K "as the central aL^eney "' (1) to dis- 
pose of America's surphis war stocks in Knrope, and (2) to settle 
all chiinis and acconnts between Allied (lovernments and their 
nationals on the one i)art and the United States War Department on 
the other part, ^a-owing ont of or in anywise connected with the war. 

The duties and responsibilities of the Commission have fallen 
naturally into two ori.neral divisiims: (1) Sales and {'2) settle- 
ments of accounts and claims. 

Salks. — The stocks, the disposition of which constituted a part 
of the Commission's task, were located chiefly in France, but some of 
them were in (Jreat Britain, some in (Jermany, Holland. Belo^iiun, 
Spain, Portugal, and Italy. Ont of them more than 2.(K)<),0()() men 
were fed, supplied, and ecpiipped pending their return to America at 
the rate of appi'oximately ■J.'iO.OOO men per month until the return 
transportation was completed the latter part of 1911). Supplies and 
equipment of the estimated value of $672,000,000 were returned to 
the T'nited States. The balance was sold in Europe for $822,- 
'.>2:^.22r>.>2. 

Sales of approximately $108,700,000 were made for cash on de- 
livery; sales of approximately $.')32.500,000 were made to the French 
Government: sales amounting to about $29,000,000 were made to 
Belgium: and sales aggregating $140,100,000 were made to I'oiand. 
Czechoslovakia. Serbia. Txomnania. and other so-called liberated 
nations of Central Europe and the Near F^ast. Those made to the 
nations mentioned are evidenced by their ."» j)er cent interest-bearing 
bonds maturing from 2 to 10 years after date. Other sales were 
made on short-term credits, which have been or are l)eing collected by 
the appropriate Army services. 

Tlie mo.st important sale consummated was what is known as liio 
•• liulk .^ale to France" of surplus war stocks remaining unsold in 
France on .Vugust 1, 1919; the considerations moving from France 

5 



6 UNITED STATES LIQUIDATION COMMISSION. 

being (a) $400,000,000 in 10-year 5 per cent bonds; (l) the assump- 
;tion by France of all rents for installations accruing after August 1, 
1919, and the agreement of France to hold America harmless against 
all claims (numbering approximately 150,000) of every nature what- 
:soever arising out of American occupation and use of such installa- 
tions and lands; and (c) the waiver by France of all claims whatso- 
eA^er (conservatively estimated at $150,000,000) for taxes or customs 
duties on properties imported into France and sold since April 6. 
1917. 

Eight hundred and eighty-one thousand nine hundred and nine 
animals were sold for $35,133,065.02. 

Pursuant to an act of Congress passed in July, 1919. the Secretary 
of War, acting through the Commission, delivered to the American 
Eed Cross, without cost to it, medical, surgical, and hospital sup- 
plies and equipment, and dietary foodstuffs of the value of 
$9,964,851.16. 

Settlements. — The settlement of the mutual claims between the 
United States War Department and the nations associated with us in 
the war have for the most part taken the form of a series of contracts 
of adjustment. Wherever possible, controversies were composed, 
mutual accounts stated, and a balance struck, so that by this set-off 
process cash payments were reduced to a minimum. The principal 
contracts^ of this nature may be brief!}' summarized as follows: 

(1)^ A contract whereby France assumed all of our obligations to 
the railroads of France, covering all services rendered from our 
entry into the war to October 1, 1919, upon our agreement to pay 
434,985,389.73 francs. This payment settles all bills for carrying and 
re-carrying more than 2,000,000 men over the longest lines of com- 
munication of any of the Allied Armies, including their travel on 
leave; for carrying the American Army of Occupation over French 
railroads to and from German}': and for transporting and handling- 
over 15.000,000 tons of freight.' 

(2) A contract whereby France assumed all obligations to local 
chambers of commerce and other claimants for costs incurred in rais- 
ing water levels for our use and benefit and for all charges for port 
dues for the entry of American vessels in French ports between 
April 6, 1917, and the time of the complete evacuation of France by 
American forces, upon our paying 3,000,000 francs. 

(3) A contract whereb}' France assumed all claims of any person, 
organization, association, corporation, commune, or department of 
France against America for damage to, use, or loss of property, or 
injury to or death of persons, arising between April 6, 1917, and 
Deceml)er 31, 1919, upon the payment by America of 12,000,000 
francs. 



UNITED STATES LIQUIDATION COMMISSION. ' 

(4) A contract of general settlement with France, dated Novem- 
ber 25, 1919, finally and for all time disposing of all claims and con- 
troversies between France an.l the War Department of the United 
States, by the terms of which France acknowledged an indebtedness 
to America (in addition to the $400,000,000 evidenced by bnlk sale 
bonds) of $177,U1>.S(',('..SC), and America acknoAvledged an indei)ted- 
ness to France (in addition to the amounts mentioned in the three 
preceding paragraphs) of 1,488,619,027.52 francs. 

(5) A contract of general settlement with Belgium, dated Novem- 
ber 17, 1919. finally and for all time disi)osing of all claims and con- 
troversies between Belgium and the AVar Department of the United 
States, by the terms of which Belgium acknowledges a net balance 
due the United States of $27.1(i-2,7L>().9:'>. evidenced by three-year 5 

per cent bonds. 

(6) A contract of general settlement with Italy, dated February 
18, 1920, finallv disposing of all claims between Italy and the AA ar 
Department of the United States, showing a net balance in favor of 
Italy of the sum of 20,106,546.75 lire, which has been paid. 

(7) Contracts with Great Britain, whereby (a) the United States 
Avas relieved from the payment of all indemnity claims under con- 
tracts for the purchase of artillery and ammunition in process of 
manufacture, upon the purchase by and delivery to the United 
States at cost of completed artillery units and ammunition equal to 
such claims: {h) the United States was relieved of a contract to take 
delivery of 210,000 bales of Australian wool, at a cost of approxi- 
mately $38,800,000, without the payment of any indemnity; (c) the 
Anglo-American tank enterprise was liquidated, yielding the United 
States 6,000,000 francs; {d) mutual interest claims were settlecl 
covering a long period, resulting in the payment to Great Britain of 
£797,854; and {e) the nitrate pool was liijuidated. 

(s) Numerous claims by nationals of France, Great Britain, Italy, 
Spain and Switzerland, principally for indemnity growing out of the 
cancellation of war contracts, have been considered and disposed of: 
446 claims which, expressed in dollars at the normal rate of ex- 
change, totaled $17,427,175.41, were settled by the payment of $8,413,- 
984.19: while 5:', claims, aggregating in amount $739,894.91. were 

rejected. 

Some conception of the C/ommission's task can be formed from {a} 
the statement of amounts involved in the settlements negotiated and 
actually consummated by and under the direction of the Commission 
of mutual accounts and claims between the United States War De- 
partment on the one part and the Allied Governments and their 
nationals on the other part (which settlements were where possible 



b UNITED STATES LIQUIDATION COMMISSION. 

consummated through set-otfs without cash payments) and (0) the 
amount of sales of property made by the Commission, as follows : 

Amounts involved in settlements: 

Settlements with France ^ $748,392,004.82 

Settlements with Great Britain 112,996,912.16 

Settlements with Belgium 2, 279, 827. 12 

Settlements with Italy 12, 620, 173. 75 

Settlements with indiviihials, associations, and others 17, 427, 175. 41 

Total amount involved In settlements 893,716,093.26 

Amounts of sales: 

Bulk sale to France 400,000,000.00 

Other sales, stated in dollars 377,905,193.23 

Other sales, stated in francs and converted 45, 018, 032. 59 

Total amount of all sales 822,923,225.82 

The Commission was created February 11, 1919. The two re- 
maining commissioners are herewith tendering their resignations on 
this the 31st day of May, 1920. The total expenses incurred and 
disbursements made by the Commission aggregate $222,883.17. 
These expenditures are a trifle less than thirteen one-hundred-thou- 
sandths (0.00013) of the amounts involved in settlements made and 
sales negotiated by the Commission. 

There is annexed to this report a brief review of the activities 
of this Commission. There is also forwarded a bound volmne of the 
minutes of the daily meetings, comprising 470 closely t^q^eAvritten 
pages, with an index. The files of the Commission have been re- 
viewed, indexed, and delivered to your representative. 

The Commission desires to acknowledge the loyal and efficient 
services rendered by the several members of its staff, without which 
the performance of its tasks would have been impossible. It is 
also the pleasure and privilege of this Commission to acknowl- 
edge that in the performance of its tasks it has had the whole- 
hearted and efficient support, assistance, and co-operation of the mili- 
tary forces, particularly of Gen. John J. Pershing, commander-in-chief 
of the American Expeditionary Forces; of Maj. Gen. J. G. Harbord, 
commanding general of the Services of Supply, and later of his 
successor, Brig. Gen. William D. Conner; and the chiefs of all of the 
services and the members of their respective staffs. While the Com- 
mission sometimes found itself handicapped and its work impeded 
for want of complete and accurate records, the only wonder is that 
the records were as nearly complete and accurate as we found them. 
The whole heart and mind and effort of the American Expeditionary 
Forces were bent on driving forward to Avin the war, not to make 
paper records, and the ordinary rules of business and of commer- 
cial usages did not and should not have obtained. For this and 



UXITED STATES LIQUIDATION COMMISSION. 9 

other reasons, it was i)articularly important that our li(|ui*lali()U 
in Europe should be accomplislied as speedily as possible and be- 
fore the officers and men who ^yere familiar witli various under- 
takin<i:s should be demobilized and their services no longer avail- 
able. It is believed that not the least of the beneficial effects flow- 
in«i from this speedy li(|uidation Avas the renderin«r possible of the 
j)rompt return to tlieir homes and to their normal pursuits of our 
soldiers drawn from civil life. The evacuation of Euroi)e liy 
American troops has been accomplished in a phenomenally short 
time, and the work of li(iuidation of both stocks and claims has kept 
pace with it. The Tnited States has been relieved of tiie trouble 
breedin<»; task and of the enormous overhead expense of dispoMUi; 
at retail of tlie irre^ndar. unbalanced, and rai:)idly deterioratin<r 
stocks located 8,000 miles from home. The settlement of claims 
has eliminated countless opportunities for annoying; controversies 
which miiiht have proved endless sources of bitterness between us and 
the (lovernments and peoples of our Allies. Sli«rhtly over a year 
after the si<rninir of the armistice, we find the Army home, brinfrin*^ 
with it the cfood-will of the Governments and their nationals with 
whom America made common cause, the surplus stocks have been 
sold, and practically every claim settled. 

Respectfully submitted, 

Edw IN B. Parker, 
Chairman^ United States Liquidation Commission — 

War Department. 
AVashington, D. C, May 31, 1920. 



BRIEF REVIEW OF THE ACTIVITIES OF THE UNITED STATES LIQUIDATION 
COMMISSION— WAR DEPARTMENT. 



I. ORGANIZATION AND FUNCTIONS. 

The siiznina- of the armistice, November 11, 1918, found the United 
States and the nations associated with her in the war ahiiost as 
unprepared for peace as they had been, a few years before, unpre- 
pared for war. The various i)()wers had continued to press their 
military operations with full viiror up to the very last moment. 
It would not have been prudent to do otherwise, for there was 
always a chance that the armistice mijzht be rejecteil or delayed. 
The constant flow, therefore, of both men and materials into France 
continued without interruption to the very end. 

Numerous stocks had been assembled by the I'nited States botli 
at home and abroad, for the equipment and supi)ly of over 'i.OOD.OO;' 
men in France and over 2,000,000 more at camps in the United 
States and rapidly movin<r toward France. On November 11, 191!". 
the <rreater part of these stocks became surplus. 

Where and how, to whom, and on wduit terms should these stocks 
be sold? Wiiat were the needs of the various nations of Europe 
with respect to them? To what extent, if at all, was it jiracticalile 
for our Government to transport them, by land or by sea. with 
both kinds of transportation demoralized by the war^ To what 
extent could commerce a'bsorl). for peace-time uses, the vast stores 
of stocks assembled by the various nations for puri)oses of war? 
To what extent could France, Bel<rium. and the " Liberated Na- 
tions " of Central Europe use them to repair their wasted and dev- 
astated areas? Could these stocks be an important factor in re-es- 
tablishing industry and a normal state of atfairs in the countries 
tlireatened liy Bolslievism? In the lio-ht of the impoverished con- 
dition of many of the peoples of Europe, as a result of war, who 
was in a position to pay for what should be bouirht. and to whom 
could credit be properly extended? In the light of the unprece 
dented fluctuations in the rates of exchange of the currencies of the 
various nations, which of them could atford to pay in terms of 

n 



12 UNITED STATES LIQUIDATION COMMISSION. 

money acceptable to our (jovernment, and to whom could dollar 
credits be given ^ 

Our Government was suddenly called u})on to turn from the busi- 
ness of making war to answer, and to answer promptly, all of these 
and numerous other questions involved in the disposition of the 
surplus war stocks, and the liquidation of war claims. While it may 
be that men of experience and ripe judgment might have held diver- 
gent vieAvs regarding the answer to some of these questions, there 
was one point on which all of the peojde of the Ignited States agreed, 
namely, that whatever the cost, whatever the inconvenience, the men 
who had been sent across the water to wage war, now that the vic- 
tory had been won and their purpose accomplished, should be 
speedily returned, demobilized, and permitted to resume their former 
pursuits, to live their own lives, in their own countrj^, in order that 
that country might return as rapidly as possible to normal conditions. 

The cost to the Nation of maintaining this civilian soldiery abroad 
was vei-y great, not only as a drain on the Public Treasury, but also 
on the private fortunes of the men and on the industrial conditions 
of the country. The demand for their prompt return was so insistent 
and so persistent that frequently other considerations had to yield ; 
and it. in no small measure, determined the solution of many of the 
problems of liquidation. The men Avho were tired from the fighting 
and elated by the victory could not l)e asked to remain indefinitely 
to engage in merchandizing, either at wholesale or at retail, the 
numerous stocks which had been assembled for war. 

It was believed that a civilian commission, working in co-ordination 
with the commander-in-chief of the American Expeditionary Forces 
and with the commanding general of the Services of Supply, and, 
through them, with each service of supply, could be more effective as 
a central agency for directing the litiuidation of stocks, and the 
adjustment of claims in Europe than could a purely military body. 

It was believed that, under the legislation existing at the time, the 
Secretary of War could, by direction of the President and as an 
incident to the war, create such a commission and clothe it with suit- 
able power to dispose of these claims and of these surplus stocks/ 

In order, however, that all possible doubt on the legality of the 
Commission's power might be removed. Congress passed an act which 
became law on INIarch 2, 1919,- conferring poAver on the Secretary 
of War, " through such agency as he might designate or establish, to 
make equitable and fair adjustments" of claims arising out of war- 
time agreements or negotiations. 

' See Appendix I for the text of the Act of May 10, 1918, and of the Act of July 9, 1918, 
both authorizing sales of war supplies to associated nations and to individuals, corpora- 
tions, and societies. 

" See Appendix II for the text of section 3 of the Act of March 2, 1919, granting to 
the Secretary of War power to make equitable adjustments of war claims. 



UNITED STATES LIQUIDATION COMMISSION. 13 

The T'nited States Li(|ui(lati()n Commission — War Department, 
which will he referred to in this report as tlie "Commission." was. 
created hy (leneral Orders, No. '24:, issued Fehnnuv 11. IJ)11),-* and 
desiprnivted as the central a<rency for the supervision and <lirection of 
(a) the disposition of all claims of every character Ijetween the 
Ignited States, on the one part, and any foreit^n State or (lovern- 
nient, oi' theii- nationals, on the other part. •rrowin<r out of or in anv 
wise connected with the war; and (A) the disposition of all prop- 
erty or interest in property of whatever kind or nature helon<j:in<j: to 
the United States, ac(iuired. constructed, or manufactured in connec- 
tion with or incidental to the war and now located heyond its terri- 
torial linuts. 

Immediately followin«i- the i)assa<re of the act of March 2. IJ)!!* 
(supra), the Secretary of War caused to he issued (ieneral Orders, 
No. 40,* desi<rnatinij: the Commission, already created, as the a<rency 
throuofh which the i)owers ofranted hy this act should he exercised in 
so far as they related to dealino-s with forei^rn Govermnents or their 
nationals, with the exception of Canada. 

The Comnussion as ori<rinally formeil consisted of four members, 
vi/,.. Edwin !>. Parker (chairman), Briof. (ien. Charles (t. Dawes, 
Homer H. Johnson, and Henry F. Hollis. The organization meet- 
i.UiT of the Commission was held in Paris on March IT. 1'.>11>. 

On July I'ti. l!)ii>. when the l>ulk <alc to France \va> jd'acticall; 
consummated, (hu. Dawes and Mr. JoluLson tendered their resig- 
nations, which were accepted. (len. Dawes returned to the United 
States, wheie. after his demohilization. he resumed Ids duties a> 
president of the Central Trust Co. of Chicago, having given tVcely 
to his country of hi-; time and means through(Mit the wai'. Mr. John- 
son joineil a commission created l>y the |)eace conference to study 
and rej)orr on conditions in Poland. The nieml)ership of the Com- 
mission was then reduced to three, anil Col. J. H. (iraham. who had 
for sometime past l)een acting as executive olHcer of the Commis- 
sion, was niaile a member. On October -M. 1!>1'.>. Senator Hollis ten. 
dered his resignation, which was acce])ted. and the \acancy thus 
created was nevei- tilled. 

Upon the organization of the Commission, rluiuus (i. Adams, 
a member of the Asheville, N. C.. bar, formi-ily a judge advocate 
with the rank of major, became the Conuuission's executive secre- 
tary, lie attended all the meetings of the Commission and partici- 
l)ated in the deliberations. pre])ared the minutes of all otiicial iu-o- 
ceedings. and orgaiHzed and <lirected the activities of the Comiiu-- 
sion's clerical staff. He continued in this po-ition until he was senr 

"See ApptMidix III for tt'.xt of ({cneral Ordors, No. :.'4. 
* See .\p|H'iulix IV for text of General Orders, No. "10. 



14 UNITED STATES LIQUIDATION COMMISSION. 

hy the Commission to Germany.' Avhen he was sncceeded by Lieut. 
Col. Echvard T. Noble. 

In defining its j)olicies, the Conmiission made it clear tliat it did 
not propose to create an org:anization to supersede such existing 
agencies of the American Expeditionary Forces as were at that time 
discharging, in whole or in part, the duties falling within the Com- 
mission's jurisdiction. It proposed, rather, to supervise and direct 
such activities of these agencies, acting through and in cooperation 
with them, creating new ones or supplementing old ones only where 
some new development made such action necessary. It would have 
been impossible for the Commission to have created in Europe, at 
that time, an independent civilian organization of sufficient size to 
supersede the Army's forces and to carry out all of the details of 
the work for which the Commission was responsible. 

"With the Avholehearted co-operation of Gen. Pershing, of Ma j. Gen. 
Harbord, and of the chiefs of the several services of supply under 
him, no time was lost in taking measures to harmonize the work of 
the Commission with that of the various Army units, and in perfect- 
ing an organization suitable for making thorough and speedy investi- 
gations looking to the adjustment of claims and the disposition of 
stocks. For the purpose of instructing all concerned in the matter of 
the relation of the Commission to the several agencies of the xlmeri- 
can Expeditionary Forces, General Orders, Xo. 18,'' prepared jointly 
by the chairman of the Commission and Gen. Harbord, were issued 
from the headquarters of the Services of Supply. 

Under the plan outlined in this order, the Army services continued 
in the custody of all property. They were to exhibit it to pros- 
pective buyers and, whenever sales were made, deliver it and procure 
the receipts. The General Sales agent of the Services of Supply 
functioned also for the Commission, negotiating sales subject to its 
approval. The several services of the Army were instructed to col- 
lect complete data on all claims falling within their respective juris- 
dictions and to report them with recommendations to the Commis- 
sion through the Army Finance Officer. The process of pa^dng cur- 
rent or other regular bills and accounts through the usual channels 
was not disturbed. The work of the Division of Renting, Requisi- 
tion, and Claims, so ably carried on by Col. Winship and his staff, 
was not interfered with. 

Regular daily meetings were held by the Commission for the trans- 
action of business, for the consideration and study of problems, for 
receiving and acting upon reports, and for hearing and deciding 
claims. The minutes of these meetings, carefully indexed, furnish a 

^ See p. 34 of this report. 

« See Appendix V for text of A. E. F. G. C, No. 18, S. O. S., 1919. 



UNITED STATES LIQUIDATION COMMISSION. 15 

convenient and condensed chr()nol()<!:i('iil record of the work of the 
Commission. 

On Friday mornin<j: of each Aveek a special mcclintj; \vas hchl in the 
office of the chairman, ^Yhich meeting was always attended by the 
Connnissioners, by the (Jeneral Sales Agent, by members of the Com- 
mission's staff, and by officers of the Army interested in the par- 
ticular word under consideration. The work relating to liquidations 
carried on by the various services was reviewed at these meetings, 
plans for each ensuing week were formulated, problems were freely 
tliscussed, information was sought by the Commission, and opinions 
Arere invited and frankly expressed. 

The Commission established an Accounting Section, whose func- 
tion was to co-ordinate accounts and claims in favor of and against 
the various Governments with which the Arni}^ had dealings. This 
Accounting Section rendered valuable service in the negotiations 
resulting in the general settlement agreements with France, Italy, 
and Belgium, and also in the settlements and negotiations with 
(ireat Britain. It has also been of considerable assistance to the 
Commission in the compilation of statistics prepared from informa- 
tion furnished by the various Army services. 

The activities of the Commission divide naturally into two main 
groups: (1) Those relating to sales, and (2) those relating to settle- 
ments and adjustments of claims. Because of the location of stocks 
and of claimants, these groups, in turn, divide geographically. The 
account of tlie work Avill be given according to these divisions. 



II. SALES. 



SALES TO THE REPUBLIC OF FRANCE. 

When the Commission took up its work, it found over a million 
and a half of American troops in Europe, carino: for American prop- 
erty scattered all over France, over England, on the Rhine, and, in 
limited amounts, in Italy, Bel<rium, and Spain — property of every 
kind and description : installations and movables, factories, ware- 
houses, docks, railroad yards, railroad equipment, motor transport, 
telephone and telegraph lines, food, clothing-, tobacco, ammunition, 
guns, machinery, raw materials. Some of it Avas new, some of it 
was worn out, much of it was used. 

National policy demanded, international policy demanded, that 
these troops be sent home without delay. Every day they remained 
in Europe cost a huge sum, not only to the Nation as such in pay 
and subsistence and in the loss of their enormous producing capacity 
at home, but in personal loss to the individuals because of dela^ m 
resuming their accustomed pursuits. 

The docks, factories, assembling plants, and other installations 
were constructed on land belonging to some 150,000 separate ow^ners, 
giving rise to unnumbered claims for rents, requisitions, reston cions, 
and damages. This property had been assembled and installed under 
extreme pressure, for immediate and temporary use, with an eye 
single to winning the war, and with only casual reference to its 
dis-establishment. Most of it was located in a country bled white in 
every vein by more than four years of war. It was located in a 
country w^hose exchange was falling on every market in the world. 
It w^as located in a country the traditions of whose nationals are 
those of careful and exacting purchasers, and a country fully aware 
of its financial distress and consequent consideration due it in solving 
its problems of peace by the peoples associated with it in fighting 
the battles of war. But it was located in a country filled with a deep 
and genuine, and, let us hope, lasting good-will toward America. 

At the threshold of these labors the members of the Commission 

examined with studied care, both individually and collectively and 

in conference with the Secretary of War, the problem involving 

the wisdom of the United States selling its European surplus stocks 

16 



UNITED STATES LIQUIDATION COMMISSION. 17 

uhroad or of transportino- them to Aniericu for sale. Obviously 
the installations luul to be sold in France; for, if they had been 
disniuntled. their salvage value would scarcely iiave covered tiie cost 
of sahaginu'. of restoring the land, and of settling rental, requisi- 
tion, and damage claims. 

The economic as well as tlie social Avelfare of our country made 
the demand imi)erative that every available trans-Atlantic- vessel 
should l)e i)r('ssed into ser\ice for the speedy return of our trooj^s 
to America. Past experience had pro\en and subseciiicnt experi- 
ence lias conhrmed that it would have been impracticable to trans- 
port by rail to the ports, witliin any reasonable time, these immense 
stocks. The French railroads were thorougidy demoralized by the 
four years of war during which time maintenance had been reduced 
to the minimum: while additions, betterments, and extensions had 
been entirely lacking. Consecpiently congesticm in rail trans})orta- 
tion was unprecedentedly great in France. 

A very large percentage of these stocks, manufactured and as- 
sembled under pressure, handled and re-handled under tremendous 
handicaps, were in a contlition and of a ciiaracter Avhich clearly 
would not have justified the cost of returning them to America. As 
our troops were evacuating France, we had to look forward to the 
time when we would be left without facilities for keeping posbes- 
sion of, guarding, handling, delivering, or shipping home these 
go'>ds. It was clear that the hungry, cold, and industrially de- 
nu-ralized people of Europe stood in crying need of a large per- 
centage of these supplies — supplies which under existing conditions 
could not, as a whole, be advantageously returned to America at 
any ime, and such part of them as might justify the cost of han- 
dling and transportation could hardly be held in France until con- 
ditions should become nearly enough normal to make possible tlieir 
shipment. It was, therefore, after the most careful and iiainstaking 
consideration, and after prolonged conferences between the Secre- 
tary of War and the members of the Commission, that the con- 
clusion was definitely and unanimously reached that it was to the 
interest of the United States and the duty of the United States to 
sell the major part of these European surpluses in Europe. 

But there were several not inconsiderable obstacles in the way of 
a speedy and businesslike disposition of these stocks even in Europe. 
France really needed and wanted many of them. Belgium wanted 
and needetl some of them. The so-called "liberated countries" of 
Central Europe and the Near East were in dire need of all they 
could get in the way of foodstuffs, clothing, medical supplies, and 
transportation equipment. But none of these countries were in a 
position either to pay cash or to purchase on short-time credits. 
18317G— 20 2 



18 UNITED STATES LIQUIDATION COMMISSION. 

The exchanue of every one of them was far below normal and was 
declining rapidly. 

The first problem, however, which confronted the Commission 
was tliat of determining just what it had for sale and what wonld 
be reasonable selling prices. The task of preparing comprehensive 
but condensed Avorking inventories, classified and summarized within 
a compass small enongli for practical use, setting forth the quantities, 
nature, and condition of these stocks, their cost laid down in France, 
and their probable utilization or sale value, was one of immense 
proportions. This difficult}^ was tremendously enhanced by the facts 
that (1) the stocks had been acquired from many different sources, 
(2) they were located in several liundred places, (3) their quantity 
and condition was being reduced by constant use, and (4) their 
value was too often diminished by handling, natural deterioration, or 
by unavoidable exposure or disuse. 

After careful study and c-onferences with the Army officials and 
especially with the chiefs of each of the services and the members of 
their staffs, the Commission adopted a plan and prescribed a form for 
the compilation of inventories of personal or movable stocks (as 
distinguished from installations, which were separately inventoried) 
under 18 distinct categories or classes, each of which categories was 
in turn subdivided.^ 

The task of compiling these inventories, summarizing and classi- 
fying them, Avith a view^ to showing, so far as practicable, the relative 
conditions of the various articles was one bristling with difficulties, 
especially as during all of this time the American Expeditionary 
Forces was a " going concern." The depots w^ere necessarily drawn 
upon for current supplies for the troops in France, for return of 
materials and equipment to the United States, and for supplying 
and equipping the American forces in Germany. New stocks were 
coming in from time to time as agreements in cancellation of con- 
tracts of purchase or manufacture w^ere reached and small deliveries 
taken in liquidation. Stocks were constantly flowing into the main 
depots from smaller posts and outlying districts as these were evacu- 
ated. For the compilation of these inventories the Commission was 
compelled to rely upon the Army, which held the custody of the 
stocks. The Army had to rely upon civilians who had come to 
France to fight, not to engage in Army clerical work — men who hav- 
ing won a glorious victory had one thought uppermost in their 
minds — to return home. The Army had a personnel constantly shift- 
ing and changing, due to withdrawals for return to the United States, 
to civilian life and interests. But it is believed that each service did 
its best, and, on the whole, did well, considered in the light of all of 

' See Appendix VI for list of the 18 " Categories," witli tbe classes of stocks under 
each. 



UNITED STATES LIQUIDATION COMMISSION. 19 

4 
the cireiunstrtnces. It is interestinir, parenthetically, to note here that 
neither the British nor the French services have even yet compiled a 
general inventory of their surplus stocks. 

The problem of valuino- the inventoried stocks was fraught Avitli 
many difficulties, Avhich had the most painstaking consideration of 
the Commission and its advisors. Clearly, cost, condition, possible 
usefulness, supply and demand were the principal factors for consid- 
eration in determining selling value. But cost varied greatly on ac- 
count of the multiplicity of sources of supply of almost an infinite 
number of articles, and the unknown and necessarily estimated ex- 
penses of transportation and handling. Condition varied with use, 
extent of handling, care, action of the elements, etc. Utilization 
value is necessarily indefinite, depending on demand and supply and 
the location of the stocks and transportation facilities, on whether 
the stocks are complete or broken, balanced or unbalanced, and on 
numerous other factors. As the work of preparing, classifying, and 
summarizing the inventories by categories progressed, the problems 
of valuing these stocks were studied intensively and continuously 
by the Commission and its advisors and, at the same time, by the 
French authorities, with whom the Commission was negotiating for 
their sale. 

The work of supervising for the Commission the compilation of 
inventories, according to categories, was intrusted to Col. J. H. 
Cxraham, who had already, in the Army Engineer Corps, abundantly 
demonstrated his ability, thoroughness, and trustworthiness. It took 
a strong force, working continuously and under constant pressure, 
more than six weeks to complete these inventories and to summarize 
and classify them. As the work progressed, the Commission, with 
the assistance of Col. Graham, the chiefs of the services and experts 
draAvn from each service, carefully studied the inventories, took into 
account and discussed every known factor of value, giving to each 
factor such weight as seemed proper, and fixed and determined what 
they believed to be reasonable selling values. Actual war costs, in- 
cluding transportation and handling, were naturally the starting 
point and one of the determining factors. Pre-war normal costs were 
considered and quite frequently these were found too Ioav. As these 
stocks were assembled, shipped, handled, and stored under conditions 
of abnormal pressiu-e, their depreciation was in many instances ab- 
normally great. jNIany of the stocks were designed for war uses only 
and had a relatively small commercial value. Both France and Eng- 
land had large surpluses of many of the materials, which supple- 
mented by our stocks in Europe, were more than the markets of the 
world could readily absorb for several years to come. 

All of these facts, and many other incidental ones, were taken into 
account in arriving at the '* estimated present values " or " utiliza- 



20 UNITED STATES LIQUIDATION COMMISSION. 

tion values" of these stocks by cate<2:ories. These were intended to 
represent prices at which they could, when classified, assorted, and 
conditioned, be sold in France at wholesale. From the ag'gresrate 
amount this reached it was oliAiously proper to make liberal deduc- 
tions to cover the cost of merchandizino;. labor, storage, insurance. 
interest, and other overhead expenses. The fact was taken into ac- 
count that there will inevitably be a large deterioration, not only 
in the quality of the stocks, but also in their market price before all 
of them can possibly be disposed of. The Commission took into 
account the risk of loss by fire, by theft, and by other causes. They 
took into consideration the fact that the stocks were widely scat- 
tered, had not been assembled for commercial purposes, and were 
not in the hands of a going concern, equipped to replenish them 
from time to time and market them to the best advantage. Giving 
due alloAvance to all of these considerations, it was concluded that 
a fair deduction from the aggregate " estimated value '" of these 
stocks for the purposes of a bulk sale would be 25 per cent. On 
this basis the stocks and installations were valued, as of July 19. 
1919, at $562.2;3().S(}0.02.^" and this is the value whicli the Commis- 
sion had in mind when it entered upon the final stage of its negotia- 
tions with the representatives of France, which resulted in the con- 
summation of the " bulk sale." 

In the meantime the Commission, beginning with interviews held 
in March, had been diligent in ])ressing its negotiations with the rep- 
resentatives of the French Government with a view to concluding a 
sale or to developing the fact that one could not be made. INI. Paul 
Morel, the Sous-Secretaire cl'Etat aux Finances pour Liqiddation des 
Stocks (the minister particularly charged with the liquidation of 
war stocks), had been designated by the French Government as its 
representative to deal with the Commission in matters pertaining to 
the contemplated purchase. Numerous conferences were held with 
him. At a long meeting on April 7. it was agreed in principle that 
France should purchase all of the American installations at a price 
to be agreed upon, assuming, as part of the price, the payment of all 
claims for rents, requisitions, restorations, damages, and other 
charges against the United States which had arisen against these 
properties. 

The disposition of the installations was the first problem under- 
taken by the Commission. Immediately after its creation and before 
the chairman left the United States, a cable was sent directing the 
preparation of an inventory of all American Expeditionary Forces' 

^ See Appendix VII, Chart A, which shows summai-ies of values by categories on 
which the final negotiations with France wero based. The difference between column F 
and column H is represented by a series of differences in quantities. These reductions 
are shown by services on Chart B, Appendix VIII. They are calculated also by cate- 
gories, and represent sales and other dispositions since the inventories were made. 



UNITED STATES LIQUIDATION COMMISSION. 21 

installations in France. A very capable committee of officers from 
the Engineering Corps, with Col, J. H. Graham as chairman, was 
promptly selected and undertook this work. Later Brig. Gen. Jad- 
win became chairman of the committee and the oOO-page report which 
it prepared is familiarly known as the "Jadwin Eeport." Following 
the conference of April 7, a copy of the Jadwin Report, showing 
" war costs " and estimated " normal costs," item by item, of all the 
American installations in France, was given to M. Morel, who imme- 
diately arranged to have a large corps of his engineers make personal 
inspections and reports on these installations, checking against the 
Jadwin Report. The methods adopted by the French in valuing this 
property differed in several respects from those adopted by the Jad- 
Avin committee. In order to adjust and reconcile these differences, 
the Commission called to its aid Col. J. H. Graham, who, as already 
})ointed out, had a large hand in the preparation of the Jadwin Re- 
port. He organized a staff and placed an American representative 
with each of the units of French engineers sent out by M. Morel to 
make a first-hand study and report on the condition and value of 
the installations. AVhen the reports were completed. Col. Graham's 
committee held a series of meetings covering a period of more than 
two weeks with the committee of French engineers at which notes 
were compared, adjustments made, and differences reconciled. 

The Jadwin Report showed total war costs of all American installa- 
tions in France, includin,g transportation and handling of material, 
soldier labor, and all other elements, at $165,661,000 and normal costs 
of the same properties at $81,543,000. The joint American and 
French committee, after making deductions for the estimated liabili- 
ties assumed by France for rents, requisitions, restorations, and dam- 
ages, placed the net present estimated value of all American installa- 
tions in France at $39,256,500. 

In comparing these figures and judging their significance, one must 
bear in mind that these installations were of every conceivable type — 
barracks, camps, hospitals, warehouses, machine shops, docks, tele- 
phone and telegraph lines, railroad yards, etc. They had been con- 
structed on land for the most part requisitioned for war use and be- 
longing to approximately a hundred and fifty thousand separate 
owners. Most of these owners had claims against the United States 
for rents, for requisitions, for damages, for restorations, for damages 
to crops, for removal of vineyards, orchards, trees, and structures, 
for building roads, putting in drainage systems, etc. Our right to 
occupy these lands terminated with the war. We had taken them 
over under obligations imposed by law to return the lands to their 
owners in the condition in which we had found them. While the 
French Government, under its power of eminent domain, could ac- 
quire or permit us to acquire these properties for war use, the French 



22 UNITED STATES LIQUIDATION COMMISSION. 

law does not permit the exercise of this power in our behalf for ac- 
quiring; permanent titles. In fact, the French law does not permit 
a foreign sovereign power to acquire a^permanent title to real estate 
within its domain except by courtesy for the use of diplomatic repre- 
sentatives. The French Government, however, could ac(|uire per- 
manent title by eminent domain to such of these properties as it might 
wish to preserve or dispose of in their present condition. Manifestly, 
therefore, our position as party to a bargain was one of extreme dis- 
advantage. We had either to sell to the French Govei'nment or to 
tear down and salvage the constituent materials. 

Under a salvage program many of the properties would have 
turned out to be distinct liabilities instead of assets, especially as we 
would have been required, at a ver}^ heavy overhead expense, to hnxe 
negotiated and settled a very large number of claims for rents, dam- 
ages, and restorations. It is estimated that it would have required the 
labor of 40,000 men for a period of 6 or 8 months to dismantle 
these installations and salvage the constituent materials. This task 
would have fallen upon our Army Engineer Corps, for competent 
French labor was not obtainable. Under agreement reached Avith 
M. Morel, however, the selling value of each piece of property was 
arrived at, not by considering its salvage value to the United States, 
but by taking into account every factor entering into the determina- 
tion of the net " utilization value " of such piece of property to the 
French Government. On the whole, it is believed that the result 
obtained Avas a very fair one, alike to America and to France. 

While these studies with respect to the value of the fixed prop- 
erty were in process, the Commission pressed upon M. Morel and 
the other French representatives the plan which it had been develop- 
ing for selling to France the major portion of the movable or per- 
sonal American Expeditionary Forces' property in France. At first 
the French representatives suggested that they might select such of 
these stocks as they could use to advantage and undertake to agree 
with the Commission on a price and terms of payment. This plan 
would have left on our hands vast stocks of a character and condi- 
tion such that their return to America would not have been justified, 
and at the same time they would have been stocks of which France 
and England were carrying large surpluses. Our stores would have 
been left creamed off and more unsalable than they were at the start. 
The Commission urged upon the French representatives that as all 
these stocks were on their soil and many of them located where they 
w^ere greatly needed and as great quantities of them could be used 
to advantage in the reconstruction of the devastated regions. France 
was in a most favorable position as buyer and, under the circum- 
stances, it was her duty to buy them in bulk, taking the bad with thfe 
good. The Commission desired onlv to reserve a sufficient (luantitv 



UNITED STATES LIQUIDATION" COMMISSION. 23 

of supplies and equipment for the use of our Ann}'^ while in Europe, 
of foodstuffs, clothing, and medical supplies, to satisfy the pressing- 
needs of the "liberated nations," and to cover such sales as were 
being negotiated in Belgium, Spain, and elsewhere. 

In response to this, M. Morel submitted three alternative proposals : 
(1) France would sell these stocks as agent of the United States, 
accounting without profit for the proceeds; (2) France would take 
the stocks at a fixed price, sell them, and if the net proceeds should 
exceed the fixed price, would account to America for the balance; 
but if the net proceeds should be less than the fixed price, America 
should pa}^ to France the difference ; or (3) France would purchase 
the stocks outright at a fixed price. The third proposal was con- 
sidered by the Commission as the only feasible one and was accepted 
by it in principle. 

While these negotiations were in progress, the Commission was at 
the same time using every agency at its command to develop markets 
and to press sales outside of France. Numerous and extensive sales 
were made to the various " liberated nations," to relief societies, and 
to other associations and to individuals. On May 6, the principle 
of the " bulk sale " to France was agreed upon, subject to a con- 
clusion between the parties on price and terms of payment; and it 
Avas understood that from that day forward all sales made by 
America to France should be billed in the usual waj^ and be paid for 
by France, should the " bulk sale " miscarry, but that such bills 
should be cancelled by America, if the " bulk sale " was consummated. 
It was further agreed that the Commission might continue to make 
sales to the '* liberated nations," to Belgium, to Spain, and to others, 
but that all proposals for such sales should be submitted to M. Morel 
in order that he might keep fully informed concerning the extent 
and condition of the stocks on which his men were busily engaged 
calculating a price. It was in accord with this understanding that 
large sales were made for ex.port out of France between the 6th day 
of May and the 25th day of July, when the terms of the " bulk sale " 
to France were finally settled. 

Notwithstanding the greatest diligence on the part of the Com- 
mission in pressing its negotiations, progress was too slow to keep 
pace with the demand for the rapid withdrawal of troops, especially 
from the advance sectors. Therefore, on May 1, an agreement was 
entered into between the Commission and the French Government 
under the terms of which the American Expeditionary Forces could 
withdraw their troops from any particular zone in France, and. by 
giving 10 days' notice to the French commander in such zone, deliver 
to the French on joint inventories all American stocks located in 
the zone. These joint inventories set forth the stocks, showing 
" kind," " quantity," and " percentage of condition as compared to 



24 UNITED STATES LIQUIDATION COMMISSION. 

ncAV,"' and stipulated that the stocks were held by France without 
expense to America and subject to the directions of the Commis- 
sion. They were sio:ned by French and American officers.'' 

This procedure did not apply to 18 of the largest depots which 
were retained in the custody of America until the stocks were defi- 
nitely sold. This plan made it possible to continue the homeward 
movement of troops without interruption, and made it unnecessary 
for us to hold thousands of men in France as custodians of these 
stocks until they could be delivered under the terms of the sale. 

During all of this time the work on the inventories was being 
pressed forward. As soon as the summaries by categories could 
be finished for any service they would be handed to M. Morel, who, 
through his representatives, would use them as a basis for check- 
ing and inspecting the stocks. While this work was going on, it 
became evident that the French were very hesitant about taking the 
Avhole body of materials in a bulk, for it was becoming clear to 
them that the French Government already possessed stocks of cer- 
tain categories in excess of the amount which France could readily 
absorb for some time to come. Unfortunately, these were chiefly 
categories of materials whose return to the United States could not 
be justified and which were at the same time a drug on the markets 
of Europe, such as barbed wire, trench materials, ammunition, field 
cooking utensils, gas materials, etc. 

Finally, after much pressure, on July 2, M. Morel submitted his 
first bid, viz, 1,500,000,000 francs. It was submitted orally in con- 
ference and the reply was immediately made that the Commission 
could not give the bid serious consideration. Numerous prolonged 
conferences followed. In order that there might be no misunder- 
standing of the Commission's position, the chairman wrote at length 
to M. Morel, on July 7, a letter the spirit of which can be gathered 
from the following excerpt. 

"After the sacrifices, which can not be measured in terms of dollars, wliich have 
been made by botli of our peoples, it would be criminal stupidity on the parts 
of the representatives of both our Governments to fail to agree on the dis- 
position to be made of the surplus war supplies remaining on French soil. This 
Commission sincerely hopes that it will not be forced to sell for shipment out 
of France anything that the French people really need or can utilize to advan- 
tage, and we are therefore not only willing but anxious to make to the Gov- 
eniment of France a price for this pi'operty which will be attractive to it and 
to extend credit for the entire purchase price. 



" See Appendix IX for form of receipt given by the French Army to the American 
Army upon the turning over of stocks before the sale. The inventory referred to had the 
following headings : " Article," " Unit," " QuaJitity," " Percentage of condition as com- 
pared to new " ; and was initialed on each page by both of the signing officers. 



UNITED STATES LIQUIDATION COMMISSION. 25 

"May I not in conclusion remind yon tliat, as the treaty of peace with Germany 
has been signed and measures have been taken by your Government and ours, 
together with their associates, to insure a lasting peace, and as the American 
Expeditionary Forces are being very rapidly withdrawn and returned to their 
homes, it is imperative that the surplus war supplies belonging to our Govern- 
ment, in France, should be speedily disposed of, if not to the French Government, 
then to others who urgently need and are seeking to acquire them, to the end 
that they may be promptly and fully utilized to bring back a measure of pros- 
perity to the suffering peoples of the world." 

No good purpose could be accomplished by showing here in detail 
the course of the negotiations during the succeeding three weeks. 
They were carried on not only by the Commission and M. Morel 
but by M. Tardieu, Commandant Oppenheim, Commandant Var- 
aigne, and numerous other representatives of the French Govern- 
ment. Besides the question of price, the question of the currency in 
which the French obligation should be stated, was most earnestly 
debated between the parties. The French representatives insisted 
that the purchase price should be stated and paid in francs, while 
the Commission declined to consider any oiler not expressed m 
dollars. M. Tardieu, after conferring with the French treasury, 
proposed that the purchase price might be stated in dollars, but 
that a condition should be added to the effect that if the cost to 
France of- finally discharging the indebtedness should be more than 
5.18 francs per dollar, such excess should be borne equally by 
France and the United States. This proposition was declined. 

On July 19 the following proposal was submitted by the Frencii 
representatives : 

1. France should pay five years after date 2,035,000,000 francs. 

2. France, in her own Avay, should proceed to sell the American 
stocks and, after deducting the expenses, divide equally with the 
United States any balance exceeding the price named. 

In response to this proposal the chairman expressed the following 

views : 

1. France would not wish to dispose of these stocks on a strictly 
business basis, nor would she be justified in so doing, but she would 
desire to use them, to a great extent, in connection with the rehabilita- 
tion of her devastated regions, at prices and on terms which only 
France could afford to extend to her nationals. 

2. It would be practically impossible for France to keep these 
stocks segregated from her own property of the same class, and thus 
impossible to make a separate accounting. 

3. The plan seemed to contain the germs of controversy and fric- 
tion which might in the end cost the two Governments more than 
the value of the property involved. 

4. A definite, final, complete, and unconditional sale, leaving be- 
hind no loose ends calculated to breed trouble, was most desirable. 



26 UNITED STATES LIQUIDATION COMMISSION. 

Filially, at a i)r()loiiij:e(l conference held on Jnly '24. a tentative 
agreement was reached on terms substantially those contained in the 
final bulk sale contract. The four members of the Commission, as 
Avell as Col. Graham, participated in the discussion and the con- 
sideration of this tentative agreement, and the Commission unani- 
mously voted to authorize and direct the chairman to i)repare and 
execute in the name and on behalf of the commission, the contract 
which became the agreement for the bulk sale.^" 

Tuder this contract, dated August 1. 1919, the consideration mov- 
ing from America is : All property — real, personal, or mixed, Avithout 
guaranty of quantity, quality, or condition — belonging to the United 
States War Department and located Avithin France on that date: f<are 
and crcept (1) all animals; {-2) property otherwise contracted to be 
sold and valued at $77,265,597.88 : (H) the equipment of individual 
soldiers and military units returning home: (4) other military equip- 
ment to be returneci to the United States, valued at $15,000,000: (5) 
equipment and supplies for American forces so long as they remain in 
France, of the estimated value of $4,000,000: (G) Red Cross supplies 
valued at $10,000,000, with agreement by France to re-sell to America, 
ui>on demand, further Ked Cross material at cost to France." 

Under this ccmtract the considerations moving from France are: 
(1) $400,000,000 in 10-year 5 jier cent bonds, with semi-annual in- 
terest from August 1. 1920: (2) the assumption by France of all 
rents for. installations accruing after August 1, 1919, and the agree- 
ment of France to hold America harmless against all claims of every 
nature Avhatever arising out of American occupation and use of such 
installations and lands: (o) the waiver by France of all claims what- 
soever for taxes or customs duties on properties imported into France 
and sold since April 6, 1917. 

^lost of the jn-operty which the Commission sold in France was 
brought in without the payment of import duties. Until this con- 
tract was signed the French Government had never relinquished its 
right to claim the payment of such duties, though the point was 
vigorously pressed, both by the Commission and by the representa- 
tives of the British Government in France, that the salvaging of 
surplus war stocks was an incident of the war and as such they 
could not be held subject to import duties. The French position on 
this point was, however, a strong one. It was supported by a preced- 



>« See Appendix X for (1) a copy of tJae^lmlk sale contract as signed; (2) the French 
law of Oct. 21, 1010, ratifying the sale ; (3) the letter of transmittal of Aug. 4. 1010. 
and (4> the supplement to the letter of transmittal, dated Aug. 11. 1010. 

1' All ad.iustmeiits arising under these reservations or any of the other terms of this 
bulk sale contract have been made by the Commission and the French (Tovernmcnt and are 
merged in the contract of general settlement dated Nov. 2r>, 1010. hereinafter referred to. 
so that this bulk sale contract is now a completed transaction. 



UNITED STATES LIQUIDATIOX COMMISSION. 27 

ent set by the Ignited States Government in dealing with the sur- 
phis stocks left in the Philippine Islands at the close of the Spanish- 
American War. the usual customs duties having been paid on such 
stocks. The Commission had the inventories studied in connection 
with the French tariff schedules, and it was found that $150,000,000 
was a conservative estimate of the aggregate customs duties, payable 
under the normal rules, for all of our stocks in France. This claim 
was given Aveight in fixing the final purchase price of $400,000,000. 

The wisdom of making this bulk sale has been amply demon- 
strated by subsequent developments, particularly by the experience 
of the British (jovernment. The course pursued by this Commission 
was to promptly sell in large l)locks what could be so sold to advan- 
taae. and then sell the remainder in bulk to P'rance. XotAvith- 
standing the fact that the British war stocks Avere so located in 
France that it was unnecessary to ship them exceeding 200 miles 
both by rail and Avater to reach central points in England, and Great 
Britain Avas. therefore, not confronted Avith the problem of long- 
distance hauls on oAcrcroAvded French railroads and a 3,000-mile 
ocean voyage in order to reach her home markets ; the British authori- 
ties decided that it Avas advisable for Great Britain to consummate a 
bulk sale of their Avar stocks in France, and began negotiations with 
the French authorities to this end during the time the negotiations 
for the bulk sale of the American stocks were in progress. It is 
reported that these negotiations are still pending. The cost of hold- 
inu:, guarding, and caring for this immense Avar stock has been tre- 
mendous, and the percentage of depreciation from natural causes, 
exposure, theft, and general deterioration Avill amount to a A'ery sub- 
stantial part of their original value. These unsold stocks are of no 
benefit to anyone and their value is constantly shrinking. 

The En<dish press has severely arraigned its (Tovernment for not 
foUoAving the example of America in disposing of these stocks : and. 
while disclaiming any intention. CAen inferentially, of joining in such 
criticism, Ave feel, in the light of subsequent cA-ents. that our (tov- 
ernment has been fortunate in the policy of expedition which it 
pursued. 

From the point of vieAv of the Commission, this French bulk sale 
(1) accomplished a speedy disposition of the stocks, allowing the 
American troops to return home promptly: (2) it relieA'ed America 
of the trouble-breeding task and of the enormous overhead expense 
of otherAvise disposing of the irregular, unbalanced, and rapidly 
deteriorating stocks located 3.000 miles from home: (3) it relicA-ed 
America of the French claim for customs duties on these and other 
stocks in France : (4) it relieved America of many thousand claims 



28 UNITED STATES LIQUIDATION COMMISSION. 

of French nationals, claims which would have arisen for many years 
to come, the settlement of which would have cost vast sums and 
which Avould likelj^ have been an endless source of bitterness between 
rhe two peoples; (5) it has left America with a "clean slate" and 
has eliminated countless opportunities for annojdng controversies; 
(6) it has afforded America an opportunity of helping France to 
help herself in a manner not to offend the dignity of that nation, 
inasmuch as the need of and value to France of these stocks in France 
is much greater than is the need of them or their value to the 
United States, and finally; (7) it has given America a very fair 
money return. 

SALES FOR USE OF "LIBERATED NATIONS." 

Farly in March careful studies were made by the Commission of 
(lie pressing needs of tlie peoples inhabiting the so-called " liberated 
nations " of Central Europe and the Xear East. These studies were 
with particular reference to the extent to which the United States 
would be justified in meeting these needs from sales of surplus war 
stocks in P^urope. Extended conferences were held Avith Her- 
bert Hoover and numerous members of his staff. Information show- 
ing political, commercial, and social conditions in these countries 
came to us from this and other sources. 

On March IT, the chairman of the Commission received a letter 
from Mr. Hoover confirming Avhat he had previously said in per- 
sonal conversations and urging the importance of selling surplus 
clothing to the peoples of these countries who were suffering from 
cold and exposure. This was followed by a letter from President 
Wilson, dated March 24. urging the Commission to accept so far as 
it could consistently do so Mr. Hoover's views as to the terms upon 
wdiich dealings should be undertaken with the liberated peoples. 
The President added : 

I would be glad, therefore, if the Commission could accept as its guiding 
principle in these negotiations the fact that it is not only securing a rapid 
liquidation of materials that may otherwise prove practically unsalable, but 
also that it is an opportunity to perform a fine human service by approaching 
the matter in the most sympathetic mind.'" 

Tlirough long conferences not only with the representatives of 
the nations and organizations seeking to make purchases, but with 
members of the American peace commission and Avith many others 
familiar with the needs of these peoples, their resources, and their 
prospects; data were assembled with reference to which the Com- 

"See Appendix XI for (1) letter, Hoover to Parker, Mar. 17, 1919; (2) letter, the 
President to Parker, Mar. 24, 1919; (3) letter, Parker to the President, Mar. 25, 1919 — 
all dealing with the question of sales to the liberated countries. 



UNITED STATES LIQUIDATION COMMISSION. 



29 



mission was able to outline a basis for making sales and extending 
credits in these countries. 

The great work accomplished by the American Eelief Administra- 
tion, with Mr. Hoover at its head, is known to all the world. The 
funds, however, which were at the disposal of this organization, were 
so limited as compared to the extent of the problems with which it 
had to cope, ihat it was unable adequately to supply even the most 
elementarv necessities of life to these peoples. The Commission was 
called upon to dispose of vast quantities of salvaged clothing, includ- 
ing outer garments, underwear, blankets, boots and shoes (many 
of^'them patched) which, though decent and warm, had small com- 
mercial value. The Commission was also called upon to dispose of 
large quantities of foodstuifs, some of which, by reason of its qual- 
ity'and condition and of the form of package in which it had l^een 
prepared for war uses, had comparatively small commercial value. 
Both of these classes of stocks seemed peculiarly suitable for reliev- 
ing the absolute hunger and want of the liberated peoples. 

Sales were made not only of subsistence and clothing, but also of 
the elementary instruments of industry and transportation, in order 
that these people might be able to go to work and serve themselves, 
instead of continuing to be. as many of them were, objects of charity. 
It was believed that these sales would also jserve a very important 
function in stabilizing the governments and social institutions which 
were beginning to take shape against most terrible odds, and that 
they would help to check the insidious advances of Bolshevism. 

All of these countries are relatively rich in natural resources and 
are for the most part inhabited by sturdy and competent races. A 
study of such resources and of the numl)er and quality of their in- 
habitants convinced the C^ommission that, under all of the conditions 
as they existed at the time, the United States was justified in taking 
the risk of extending credits, especially as their indebtedness to us 
constituted the major portion of their national debts. In some 
instances it was felt desirable to make sales to co-operative societies 
or organizations, rather than to the governments. In each case, 
however, the Commission has. either directly or through such co- 
operative societv, taken government ol3ligations in payment for the 
stocks. These bonds all liear interest at the rate of 5 per cent per 
annum, payable semi-annually, and they mature in from one to six 

years after date. 

In the matter of fixing the prices and terms of purchase, the L om- 
mission occupied a position of supreme advantage over the buyers, 
for in many cases these peoples were in such a position that they had 
to buv from us or see their people go hungry and cold. Prices and 
conditions were carefully studied, however, by the Commission and 



30 UNITED STATES LIQUIDATION COMMISSION. 

every effort was made to treat these purchasers, as well as the United 
States, with aI)soliite fairness. The foodstuffs were sold f. o. b. our 
Avarehouses in France for cost to the American Expeditionary Forces, 
incliKlinti: allowances for transportation and handlinjji:. The salvaged 
slioes, blankets, and clothing, all '' renovated, overhauled, and classi- 
fied," were sold on the basis of cost, less a percentage j^or deteriora- 
tion according to class. The medicines, machinery, tools, and trans- 
port materials were sold on the basis of cost in France, less a dis- 
count for deterioration through use or otherwise. On the whole, the 
prices were rather higher than could have been procured at whole- 
sale from any other purchasers. They were believed, however, to be 
fair and just when considered in the light of the quality of the se- 
I'urities and other circumstances associated with the transactions. 

The sales which have been made to or for the use of these so- 
called *■' liberated nations " ^^ are as follows : 

Poland $59, 365, 111. 97 

Kingdom of St'rl)s, Croats, and Slovenes 20,464,191.25 

Roumania ^___ 13. 012, 689. 00 

Russian Government 428, 299. 46 

Czechoslovakia 19. 098, 874. 27 

Revalis (Estbnina) 12,262.818.99 

Vilnis ( Litluiania ) 4, 414, 861. 39 

Central Union Konsnms (Latvia) 2, .5.56, 952. 84 

Ukrailian (Ukrainia) 8,500,222.67 

Total 140, 104, 021. 84 

GIFT TO RED CROSS. 

Pursuant to an act of Congress, passed early in July. 1910, author- 
izing the Secretary of War — 

to place at the disposal of the American Red Cross such medical and surgical 
sui)iilies and sui)plementary and dietary foodstuffs used in the ti"eatment of the 
sick and injured, but which are not now essential to the needs of the American 
Expeditionar57 Forces or needed for use in the military hospitals in the United 
States or as military or hospital stores for the Army of the United Stattes, to be 
used by said American Red Cross as it shall determine to relieve and supply the 
pressing- needs of the peoples of the countries involved in the late war, 

the Secretary of War, acting through the Commission, placed at the 
disposal of the American Eed Cross, without cost to it, medical, 
surgical, and hospital supplies and ecpiipment and dietary foodstuffs 
of the value of $9,964,851.10, which were expressly reserved from the 
stocks sold to France and actually delivered to the Red Cross repre- 
sentatives. In addition to this, the French Government has, in the 

1^ See Appendix XII for a list of the liberated nations, with corresponding commer- 
cial organizations for each, with which the Commission has dealt. 



UNITED STATES LIQUIDATION COMMISSION. 31 

bulk sale contract of Aiigiist 1, 1919. assumed the obli<ratioii to re- 
sell, on the basis of cost to it, any further medical or suroical sup- 
plies and dietary foodstuffs which the American Red Cross may need 
for use in Europe, 

COMMERCIAL SALES OF PROPERTY LOCATED IN FRANCE. 

Prior to the consummation of the bulk sale to France, diligent ef- 
forts were made by the Connnission to find purchasers, for cash or 
its equivalent, for surplus stocks located in France; but on account of 
the character and condition of these stocks, the condition of exchange, 
and the difficulty of procuring transportation by railroad or water, 
it was impossible to dispose of large quantities of these stocks to 
advantage. 

The first important sale of this kind which the Commission 
authorized was made to the American Relief Administration, of 
which Herbert Hoover was director. These stocks Avere destined 
for Central Europe and the Xear East, and consisted of prime neces- 
sities — cereals, fats, condensed milk, a small quantity of medical sup- 
plies, and a few motor trucks needed for distributing them. The 
sales aggregated $15,959,455.15, and the terms were cash. The prices 
were calculated on a basis which would justify the Relief Administra- 
tion in taking these supplies in France in preference to having them 
])urchased in the Ignited States and shipped over. In this way 
shipping was economized, and a considerable portion of our surplus 
foodstuffs was promptly disposed of for cash and through a channel 
Avhich would use it to satisfy actual hunger and relieve dire distress. 

AVhen the Commission arrived in Europe it found that our Army 
had 181,909 surplus horses and mules. The demand for horses was 
very great, and the prices were good, though the demand for mules 
was more limited. Many of these animals were in poor condition, and 
the Army was rapidly declaring them surplus. xVs the estimated 
average cost of maintaining a horse or mule in France is $2 per day, 
and even more in Germany, the problem of their disposition required 
prompt attention. The Commission decided to sell them for cash 
only, and, so far as possible, at such places and at such times as they 
were found surplus. They were disposed of with reasonable prompt- 
ness through a\iction sales, sales to the French Government, to Po- 
land, to Czechoslovakia, and to others, all at fair prices. The French 
minister of reconstruction purchased several thousands, which he in 
turn sold on credit in the devastated regions of France, thus using 
them to furnish prompt aid in the problem of getting the soil back 
under cultivation and of starting the wdieels of industry. More 
than 5,000 animals were sold to Poland. The total amount realized 



32 UNITED STATES LIQUIDATION COMMISSION. 

on the sale of all American Expeditionary Forces, animals was 
$35,133,065.02, the number being 181,909.^* 

The problem of sales in Spain consumed not a little of the Com- 
mission's attention. It had two phases^ During the war our Army 
had agents in Spain who were purchasing supplies in considerable 
quantities, and upon the signing of the armistice there was a limited 
amount of these materials in Spain to be disposed of, as well as con- 
tracts to cancel and adjust. Further, during the war, when the gold 
embargo was in force, the United States had caused to be borrowed 
in Spain, in order to avoid paying a discount on dollars, some 155.- 
000,000 pesetas and the Commission made a determined effort to sell 
there for cash a sufficient quantit}^ of surplus stock to pay and retire 
this indebtedness. 

The stocks found in Spain at the close of the war were small. 
They consisted principally of horse blankets, cotton duck, vinegar, 
off ce supplies, iron buckets, salt bags, cork shavings, etc. All of 
these were sold for cash, the total aggregating $823,772.54. In addi- 
tion we had some lumber in Portugal which was sold for $38,060.59. 

In an effort to make large sales in Spain, special agents were sent 
there by the Commission to develop markets and many hours were 
spent in conference in Paris with prospective Spanish purchasers. 
But the Commission was unable to induce unj responsible Spanish 
concern to purchase any of the American stocks in France, except 
on condition that the Commission would cause deliveries to be made 
either at French ports or on the Spanish frontier. This was because 
of the great difficulty encountered in transporting stocks over French 
railroads. Finally, in order to make an advantageous sale, the Com- 
mission assumed this burden and, through the Army, loaded the cars 
at our depots and transported them to the ports or to the Spanish 
border, where deliveries were consummated. Endless annoyances 
were encountered in effecting these deliveries and there were many 
delays. By the time the bulk sale was concluded and the Spanisli 
sales discontinued, stocks aggregating in value $4,466,519.77 had 
been sold there, but deliveries could not be finished until a long time 
afterwards. They consisted principally of tobacco and engineering 
and quartermaster supplies. 

The Commission sold also to the Spanish Government 10,000 tons 
of surplus Irish potatoes which the Army had bought from Great 
Britain. The price was 1,616,147 pesetas, which amount has been 
paid in full. 

Early in 1917, before the arrival in France of sufficient motor 
transportation from America, the American Expeditionary Forces 

" See Appendix XIII for chart showing animals sold, with their purchasers and 
prices. 



UNITED STATES LIQUIDATION COMMISSION. 33 

found it necessary to purchase motor transportation from Great 
Britain. All of these cars of English manufacture which the Com- 
mission found in France were sold to an English syndicate for 
$1,202,566.46. These cars, generally speaking, had been longer in 
use and were more exhausted by wear and tear than the other motor 
transport in France. 

In addition to the sales noted above, numerous others, some small 
and some large, were made for cash from stocks of various kinds 
located in France. It should be noted in particular that, in addition 
to the bulk sale, stocks aggregating $87,780,942.76 and 232,565,047.51 
francs were sold to the French Government.^^ 

BELGIAN SALES AND GENERAL SETTLEMENT. 

The Commission made sales to Belgiiun amounting in all to ap- 
proximately $29,000,000. Belgium had claims against the American 
Army: (1) Arising out of leases of Belgian locomotives to the 
American Expeditionary Forces during the war; (2) for transpor- 
tation of troops and supplies, both by rail and on the Khine; (3) 
for port charges at Antwerp. These claims were examined and an 
account was stated showing approximately $2,000,000 in favor of 
Belgium. Instead of paying this amount, it was set off against the 
amount due the United States on all sales to Belgium, and that 
country agreed to execute and deliver to the United States notes or 
bonds for the balance, amounting to $27,162,720.95. These bonds 
mature three years after date and bear interest at the rate of 5 per 
cent per annum, payable semi-annually. 

These agreements are contained in a contract of general settlement 
entered into between the Commission and the Belgian Government 
on November 7, 1919, by the terms of which — 

Belgium releases the United States from any and all debts, claims, and lia- 
bilities, whether in contract or tort, which Belgium now has or may have by 
reason of any act done or engagement entered into on or before the 31st day 
of October, 1919, for materials or services furnished to or damages done by 
the American forces in Europe, except as hereinafter stated. 

Belgium further agrees — 
to save the United States harmless from any and all claims of whatever nature 
against the United States or members of its military or naval forces, on the 
part of any railroad company within the limits of the Kingdom of Belgium, 
whether such railway company is the property of the Belgian Government or 
not." 



IS See Appendix XIV for three charts : Chart I shows the amounts purchased by 
each country by services ; Chart II, the amounts by categories ; Chart III, the location 
in Europe of this material when sold. 

»« See Appendix XV for copy of contract of general settlement between the United 
States of America, acting through the chairman of the Liquidation Commission, and the 
Kingdom of Belgium, acting through the premier and minister of finance ; also for a state- 
ment of the account upon which this general settlement was based. 

18317&— 20 3 



34 UNITED STATES LIQUIDATION COMMISSION. 

In addition to the stocks sold to the Belgian Government, sales of 
goods located at Antwerp were made to other nations, individuals, 
firms, associations, and corporations, in the amount of $3,845,032.45. 
Of these stocks, motor transport brought $'268,339.97. A sale amount- 
ing to $1,852,326.99, consisting principally of clothing, was made 
to Czechoslovakia on the basis of 75 per cent of cost laid down at 
Antwerp (i. e., cost plus transportation and handling). The bal- 
ance of the stocks at Antwerp, consisting of broken and irregular 
groups of materials, was disposed of in a bulk sale to Poland for 
$976,583.22, the price being calculated on the basis of 70 per cent of 
cost plus transportation and handling. The price received for all 
surpluses located at Antwerp, and the Hook von Holland, including 
sales made to Belgium, averaged a little under 74 per cent of the 
cost of the goods laid down in Europe. 

SALES IN GERMANY. 

When the Army of Occupation took its position on the Rhine 
large quantities of Army stores and equipment were moved there, 
principally from France and to some extent from the United States. 
As this Army was being withdrawn from time to time and returned 
to the United States, stocks on the Rhine were becoming surplus and 
the duty devolved upon the Conunission to make disposition of 
them. The suggestion that they be returned to France and placed 
in American Expeditionary Forces' depots there for storage and 
disposition with the other stocks in France was rejected, both be- 
cause of the difficulty of transportation and the difficulty of dispos- 
ing of the stocks already in France. 

One of the first problems which arose in Germany was that of the 
disposition of surplus horses and mules. There was a serious short- 
age of forage, and keeping the animals over a long time while a 
market was being found was very expensive. Prompt action was 
taken by the Commission. Many of the animals were sold to indi- 
viduals and firms through auction sales, competitive bids, and other- 
wise. A large number of them went to the Minister of Reconstruc- 
tion of France, some went to Poland, and a few to Czechoslovakia. 

In order to direct the disposition of the stocks in Germany more 
satisfactorily, the Commission established a branch office at Coblenz 
about the 1st of July, and put it in charge of J. G. Adams, as 
special conunissioner. Mr. Adams had previously been serving as 
executive secretary of the Commission. Negotiations were taken up 
forthwith with several of the strongest German financial institutions 
having connections in the United States with a view to the formation 
of groups or syndicates wdth facilities for making purchases in 
dollars, or on dollar credits. Consultations were held Avith such 



UNITED STATES LIQUIDATION COMMISSION. 35 

institutions as Warburg & Co. of Hamburg; Speyer and Ellison of 
Frankfort; Oppenheim & Son of Cologne; the Deutches Bank of 
Berlin, and others; while at the same time the Commission, through 
the War Department at home, was trying to interest the American 
correspondents of these houses in the transactions. Negotiations 
were also opened with numerous American, French, English, Dutch, 
Belgian, and Scandinavian concerns. All of these people were inter- 
ested in the stocks which we had for sale. Many of them sent repre- 
sentatives to inspect them; but without exception, after days and 
weeks of conferences and discussions, they expressed the conclusion 
that under the conditions as they existed at that time, particularly in 
view of the fluctuating rates of exchange, the business was quite 
impossible. 

On August 10, after this effort to sell on a dollar basis was believed 
to be a failure, it was decided to send out a notice to a large number 
of prospective purchasers offering the goods on more liberal terms. 
The notice offered the stockis as a whole, or in large blocks, to be paid 
for in American dollars, Swiss francs, Dutch guilders, British 
pounds, French francs, or German marks, at the several current rates 
of exchange, preference being given to bids based on currencies in the 
order named. Notwithstanding the fact that every effort was made to 
encourage bids under this offer, no satisfactory bid was received. 
There were several instances of speculators who made inadequate 
offers on small lots of the most desirable stocks, the sale of which 
would have prejudiced the sale of the stocks as a whole. All bids were 
rejected. 

The exchange situation in the Rhine country proved to be an almost 
insurmountable obstacle in the way of a reasonably satisfactory dis- 
position of these stocks, which were carried on our inventories in 
terms of dollars at war-time cost plus 20 per cent for transportation 
and handling, save motor transport, to which was added 45 per cent 
of first cost for transportation and handling. 

A great part of the stocks were of commodities produced in Ger- 
many which could be purchased on the Ehine in the open market at 
retail, at prices considerably less than those stated in our inventories. 
The purchasing power of the mark had decreased, perhaps not more 
than 200 per cent, while its exchange value on the American dollar 
had decreased more than 500 per cent. The difficulties encountered 
in selling American goods in Germany under such conditions are 
quite obvious. 

An effort was made to organize a syndicate which might buy 
these stocks in exchange for certain German products which are 
required or can be utilized to advantage in the United States; pot- 
ash for example. It was found, however, that the Germans w^ere 



36 UNITED STATES LIQUIDATION COMMISSION. 

fully aware of the importance to them of disposing of such of their 
products as were marketable in the United States for dollars only, 
for it is only by selling for dollars that they can strengthen their 
exchange with us. 

While these efforts were being made to sell the stocks as a whole, 
there were certain smaller sales which had to be made by way of 
salvage. The Army of Occupation had taken with it a large supply 
of Signal Corps equipment, both for its own use and for equipping 
the proposed Galician expedition. Such of this stock as was de- 
signed for field use and has small commercial value was returned to 
the United States for the use of the War Department. What re- 
mained, being largely unserviceable, was sold for 1,200,000 marks. 

The surplus tobacco was deteriorating and was not an important 
factor for fostering a bulk sale, so it was sold separately. It brought 
cost plus 6 per cent. The candy and confectionery was deteriorating. 
We had a surplus which was carried on the inventory at $1,200,000. 
It was sold early in August at 87| per cfent of the inventory valua- 
tion, which was more than first cost to the United States. 

We had a stock of so-called German armistice trucks. These had 
been allotted to the American Army under the terms of the armistice. 
They had been built in Germany under war conditions, were equipped 
with live axles, chain drives, and steel tires. They had deteriorated 
considerably through use and through standing in the open for more 
than eight months, and they needed considerable repair before they 
would be valuable for commercial uses. They were sold in block 
for 13,000,000 marks. 

Finally, in October, after numerous failures in other directions, 
the Commission was successful in interesting a strong English syndi- 
cate in the purchase of the surplus used motor equipment in Ger- 
many. This equipment represented a high percentage in cost value 
of all our surplus stocks in Germany. It was rapidly deteriorating 
from non-use and exposure to the elements and had to be handled 
promptly or it would soon have become practically useless. After 
a long series of negotiations this syndicate has purchased and taken 
possession of all of the American surplus motor transport on the 
Rhine on substantially the following basis : 

1. The estimated purchase price is fixed at £3,250,000, of which 
£325,000 has been paid in cash. 

2. This estimated purchase price is subject to increase or decrease 
on check of the equipment and material. 

3. If any controversy as to quantity or classification should arise 
in making such check, such controversy shall be settled by the Com- 
mission's present representative in Germany, Lieut. Col. T. H. Krutt- 
schnitt, acting for America, and by Lieut. Col. G. W. Parkinson or 



UNITED STATES LIQUIDATION COMMISSION". 37 

Sir Percival Perry, acting for the purchasers, and in the event of 
their disagreement the decision of Lieut. Col. Kruttschnitt shall be 
final. 

4. The balance of the purchase price shall be paid in three equal 
installments, the first maturing July 1, 1920, the second December 1, 
1920, and the third April 1, 1921, together with interest on the entire 
amount at the rate of 5 per cent per annum from April 1, 1920, 
interest payable semi-annually. 

5. The United States, through its general sales agent in Germany, 
Lieut. Col. Kruttschnitt, or his successor, remains in constructive 
possession of and continues supervision over all of the property pur- 
chased, retaining a lien upon it for the purchase price until the same 
is paid in full. None of these stocks can be withdrawn from their 
present locations and sold by the purchasers without the consent of 
Col. Kruttschnitt and the payment to America of an amount equal 
to the full purchase price of the property so withdrawn. 

6. There has been deposited in the Guaranty Trust Co. of New 
York, Paris branch, £250,000 to the credit of" T. H. Kruttschnitt, 
trustee, and subject to his and the purchasers' joint check. This fund 
is to be applied to putting said motor equipment in condition for 
use and sale. It is stipulated that the purchasers shall, on the de- 
mand of Col. Kruttschnitt or his successor, make additional deposits 
from time to time to maintain this fund, so that it shall never be 
substantially less than £250,000. It is further stipulated that, if at 
any time Col. Kruttschnitt or his successor in office or the War 
Department of the United States shall not be satisfied with the 
progress made by the purchasers in conditioning and marketing this 
motor transport, the entire balance of this deposit may be withdrawn 
and applied toward the payment of the purchase price. 

7. The contract is to be construed according to the laws in effect 
at Washington, D. C. and the purchasers irrevocably designate the 
British Consul General at New York as their agent, on whom service 
may be had in any suit Avhich may be brought by the United States 
to enforce the terms of the contract.^'^ 

It is believed that this contract amply protects and secures the 
United States, and that, all things considered, it is a most advan- 
tageous one from our point of view. 

The disposition of the motor transport on the Rhine left us with 
depleted surplus stocks, the sale of which, excepting the subsistence 
and clothing, was difficult. After prolonged conferences with rep- 
resentatives of Poland, the Commission effected a sale to the Polish 
Eelief & Supply Corporation, by the terms of which all of the re- 

»'See Appendix XVI for copy of (1) the contract of sale, dated Oct. 1, 1919, and (2) 
supplement to contract of sale, dated Dec. 3, 1919. 



B8 UNITED STATES LIQUIDATION COMMISSION. 

maining surplus stocks on the Rhine were sold in bulk on a basis of 
70 per cent of their inventoried A^alues. These stocks consisted prin- 
cipally of subsistence, clothing, ordnance, medical supplies, and a 
great variety of miscellaneous equipment. Deliveries under this sale 
have been completed and the stocks all moved out of Germany by 
Poland. The total bill was $5,536,867.71. 

SALES IN ENGLAND. 

During the war. Great Britain had been made a United States 
military base, called " Base Section No. 3," for the purpose of {a) 
bringing troops through, (b) purchasing materials, (c) maintaining 
hospitals and rest camps, and (d) training aviators and assembling 
machines. 

This program involved our owning a large amount of property in 
England. AVe could not take title to the land under English law, 
and when we took possession it had to be under a contract to re- 
store the land to its original condition at the close of the w^ar. 
Prior to" the armistice the United States had built, or taken over 
from the British, numerous and extensive installations in the form 
of (a) aviation plants and airdromes, (h) hospitals, (c) rest camps 
and depots.^^ This property had to be sold out as it stood, or, if 
salvaged, the ground had to be restored to its original condition. 

Besides the buildings and installations constructed by the United 
States, many more buildings were rented by our forces either on 
ordinary leases or under requisition proceedings carried out on our 
behalf by the appropriate British Government department. 

Further, we had war materials- — ordnance, quartermaster, engi- 
neering, medical, motor transport — of every description, of which 
we were in process of taking delivery at the time of the armistice. 
A large percentage of these stocks had been purchased for us by 
various departments of the British Government, and was of course 
British made goods. Shortly after the armistice, the British offered 
to assist us in the sale of this surplus property through their Dis- 
posal Board, in a manner analogous to the assistance which they 
had given us in its purchase. It was found, however, that w^hile the 
British Disposal Board got good prices, it w^as rather slow in selling- 
stocks for us, and we have therefore taken little advantage of the 
offer. 

As soon as our sales in England began, the British Government 
raised the question of customs duties on goods brought in from the 
United States. These duties were paid on some of the earlier sales, 

•® See Appendix XVII for a catalogue of all installations, or property attached to 
the realty, which the United States has owned in Great Britain during or since the 
war, showing the number of buildings, size, approximate cost, and disposition. 



UNITED STATES LIQUIDATION COMMISSION. 39 

but later when the French Government raised the same question 
against the British for the sale of goods in France, and the general 
question was under discussion in Paris, the British agreed to with- 
draw their claim for duties so far as it referred to American goods. 
They did, however, insist that our surpluses should not be thrown 
indiscriminately on their markets so as to disturb trade conditions. 
As this demand seemed only reasonable, and would be in accord 
with our precedent in the Philippines at the close of the Spanish 
War, we agreed to sell only after obtaining permission of the ap- 
propriate department of their government. This permission they 
have always been very generous in granting. 

The disposition of buildings and other structures has been the 
most serious problem. Each plant, hospital, and camp has had to 
be worked out separately. The receipts from this class of property 
have naturally been very small in proportion to the original costs, 
because our obligation to restore the site would in most cases have 
cost more than the salvage value of the buildings removed. We have 
thus been in a very awkward position as a party to a bargain. The 
British Government, however, has always exhibited a most cordial 
desire to aid us in any way possible in these dispositions, even con- 
senting to take title to land in our behalf whenever that action would 
help us to reach a better settlement. 

The personal property has been disposed of in several ways. The 
bulk of it was sold out in relatively small quantities, by private sale, 
by auction, by sealed bids, through agents, or through the British Dis- 
posal Board, to British nationals principally. Some of it has gone to 
other buyers — to the Commission for Relief of Belgium and Northern 
France, and to Poland."* A considerable quantity of material, es- 
pecially artillery, aviation, and chemical-warfare equipment, has 
been shipped home, on the theory that these articles would be useful 
to the Army for training, educational, and other purposes. 

During the war the United States built a submarine cable for war 
uses between Cuckmere, England, and Cape d'Antifer, France. Un- 
der authorization of the Commission, this cable was sold to England 
and France as joint purchasers, for £30,000, paid to us by England. 
The conditions of the contract are that the purchasers shall jointly 
own and operate the cable, and that at any time, upon request, they 
shall lease to the United States this or a similar cross-channel cable. 



19 See Appendix XIV, Chart III, column marked " England." This shows the total 
receipts from all sales made in Great Britain, the amounts being shown by " Categories " 
of property. 



40 UNITED STATES LIQUIDATION COMMISSION. 

SUMMARY OF SALES. 

For the purpose of telling in a brief and graphic way the long story 
of all sales of surplus war supplies in .Europe, other than the bulk 
sale to France for $400,000,000, three charts have been prepared, 
expressed in terms of selling price.^" 

Chart I shows the totals in terms of selling value of all sales made 
to each purchasing nation and to private firms, arranged according 
to the respective services of the American Expeditionary Forces in 
whose possession the stocks were held when sold. 

Chart II shows the purchasers in the same way as Chart I but 
the materials are listed according to the 18 categories ^^ by which 
all American Expeditionary Forces' stocks have been classified, both 
for the purpose of purchase and of sale in Europe. 

Chart III also shows the stocks by categories, but, in place of the 
purchasing nations across the top there is given the countries in 
which the stocks were located at the time of their sale. 

These charts show a total of sales aggregating $377,905,193.23 and 
233,254,054.87 francs. Converting these francs into dollars at the 
normal rate of exchange, and adding to these sums the $400,000,000 re- 
ceived from France for the bulk sate, we have a grand total of 
$822,923,225.82 received for all sales of War Department materials 
made in Europe. 

In payment for these stocks, government bonds aggregating 
$564,233,302.87 have been taken from France, Belgium, and eight 
countries of Central Europe and the Near East. The French bonds 
were for $400,000,000. Sales amounting to $108,570,596.63 and 
689,007.36 francs were made for cash on delivery, and short-term 
credits were taken for the rest. The appropriate Army services have 
been taking care of the collections on these short-term credits and 
nearly all of them have been liquidated at this time. 

20 See Appendix XIV for Charts I, II, and III, summarizing in different ways alL 
sales of war surpluses in Europe, except the bulk sale to France. 

21 See Appendix VI for a list of the 18 categories with the sub-headings under each. 



III. SETTLEMENT OF CLAIMS. 



When hostilities ceased, November 11, 1918, the United States had 
2,056,123 men in France, and plans to send over 2,000,000 more men 
were far advanced. The country was investing in the war in terms 
of billions of dollars. Practically every industry in "America was 
doing something to support the Army. The War Department itself 
was operating vast factories. It was buying vaster stores of sup- 
plies. In laying and developing plans for all of these activities, 
available shipping — the limiting factor — had to be taken into ac- 
count, as well as the location of raw materials and the equipment 
and factory facilities for producing war supplies, both at home and 
in Europe. Consequently, America bought from Europe when and 
what Europe could produce most effectively and expeditiously, and 
she sold to Europe when and what she could produce most speedily 
and effectively. 

Thus it came about that many buying programs and arrangements 
were in full force and vigor when the armistice was signed; some 
in the form of technical contracts, some as pools, and some the result 
of oral understandings or plans worked out by the Allied Purchasing 
Commission. All of these programs, whatever their form, had to be 
suddenly broken off. The expense of stopping this vast production 
at the end of the war was, in many cases, very great. It was clear 
that the Allied and Associated Nations ought to share fully and 
equitably this expense, in accordance with the share of work which 
each had undertaken in behalf of the other, but in most instances, 
the facts were complicated, voluminous, and somewhat obscure, 
while a proper basis for the apportionment of such expenses was 
very difficult to work out. 

Nearly a month prior to the creation of this Commission, the Secre- 
tary of War appointed Chester W. Cuthell as his Special Repre- 
sentative, and clothed him with full power to organize a staff of 
lawyers and accountants for the purpose of developing the facts and 
concluding agreements in regard to " the relations of the War Depart- 

4] 



42 UNITED STATES LIQUIDATION COMMISSION. 

ment with the several Governments of our European Allies growing 
out of orders, purchases, and engagements given or arising in the 
procurement of munitions, supplies, and services in this country by- 
such European Allies." Mr. Cuthell^and his staff had their work 
well under way when this Commission was established, and the mem- 
bers of the Commission conferred with him freely and fully and took 
measures for co-ordinating his work with theirs prior to their leaving 
America for Europe. 

The activities of Mr. Cuthell and his staff have always co-ordinated 
with those of the Commission, and through the efforts of each to help 
the other, the effectiveness of both organizations has been materially 
increased. 

All claims between the War Department and the Governments of 
any of our European Allies gTowing out of the war and arising in 
America were fully developed and presented b}^ Mr. Cuthell and the 
members of his staff, either in America or in Europe. In this work, 
Mr. Cuthell had the assistance and co-operation of the Commission. 
The claims which he established against the French Government were 
made a part of the final accounting by this Commission in its " Gen- 
eral Settlement " with that government. All claims of this nature 
between the War Department and our European Allies, or their 
nationals, which arose in Europe, were developed, studied, and dis- 
posed of by the Commission. Mr. Cuthell and his assistants have 
acted as the Commission's representatives in Washington, and as 
such have rendered invaluable services. 

The following pages will present a brief record of the more im- 
portant settlements which the Commission made in Europe : 

SETTLEMENTS WITH GREAT BRITAIN. 

On March 10 and 11, 1919, the chairman of the Commission and 
Mr. Stettinius held several conferences in London with representa- 
tives of the British war office and the British ministry of munitions, 
at which the more important claims of Great Britain against America 
were considered. Particular attention was given to the claim grow- 
ing out of the cancellation by America of the contract, in terms of 
which Great Britain had agreed to produce and furnish certain ar- 
tillery and artillery ammunition. Mr. Stettinius had already held a 
series of conferences with the British on this and other matters. 

At these March conferences certain fundamental principles were 
recognized by both parties as standards by which mutual claims 
should be measured. The chairman had, before leaving Washington, 
discussed these principles with Mr. Cuthell. They may be summar- 
ized in General terms as follows : 



UNITED STATES LIQUIDATION COMMISSION. 43 

1. Neither government shall, in connection with any war contract 
or transaction, make a profit out of the other, and this principle 
shall be applied regardless of prices, tentative or fixed, named in 
contracts. Actual cost shall control in fixing prices between the 
two governments, and there shall be neither profit nor loss as between 
them. 

2. An agreement, whether written or oral, regular or irregular, if 
clearly established between the authorized representatives of the re- 
spective governments, shall be binding on both. 

3. In the absence of a definite agreement, where it is clearly es- 
tablished that one government, at the request or on the suggestion 
and with the advice and consent of the other, incurred obligations 
for the common benefit of both, the expense should be shared by 
each party in proportion to its benefits, past or prospective. 

In a letter written by the chairman to the British representa- 
tives, confirming the London interview, the following language was 
used : 

It is understood that the broad, general principles which have been recog- 
nized by both governments in reaching the adjustments above outlined shall 
obtain in the settlement of claims of like nature which will be presented by the 
United States Government to the British Government for payment, including 
claims growing out of the creation of facilities for the manufacture of, as well 
as expenditures made for the production of, Liberty motors, nitrocellulose 
powder, cotton linters, etc. 

This statement was made by way of assistance to Mr. Cuthell, who 
was engaged at that time in Washington on the preparation of the 
claims against England referred to. 

The fact that these simple principles were kept constantly in mind 
in all of our dealings with the representatives of Great Britain has 
enabled both parties to reach sound solutions of many difficult prob- 
lems ; and, on the whole, it is believed that the cordial relations be- 
tween the respective governments and peoples have been cemented 
rather than strained by the negotiations which have taken place. 

BRITISH ARTILLERY AND AMMUNITION SETTLEMENT. 

From time to time during the spring and summer of 1918 America 
placed orders with Great Britain to manufacture or cause to be 
manufactured and delivered to America certain quantities of artil- 
lery and artillery ammunition. All such agreements, some of which 
were vague and indefinite and might have been so construed as to 
have given them far-reaching importance, were merged and super- 
seded by a certain agreement, dated October 19, 1918, entered into 



44 UNITED STATES LIQUIDATION COMMISSION. 

between Mr. Stettiniiis, Special Eepresentative of the Secretary of 
War, and Mr. Churchill, British Minister of Munitions.^- 

Immediately after the armistice, Mr. Stettinius gave notice of the 
cancellation of the contract and at once began negotiations with a 
view to reaching a fair and equitable settlement for losses occasioned 
thereby. The negotiations which were merged in the agreement of 
October 19, 1918, covered a considerable period and it was clear that 
the British manufacturing operations had been maintained, and that 
she had made plans for increased production, in order to meet 
America's demands. A large part of the material contracted for 
had already been produced and a majority of the remainder was in 
process. Mr, Stettinius conducted his negotiations on the assump- 
tion that, as a large part of these materials were already in being and 
were in excess of the British requirements, it would be to America's 
interest to accept completed guns, equipment, and ammunition rather 
than to pay large indemnities and receive nothing in return. 

After consulting with our ordnance officials in London, Paris, and 
Washington with a view to determining what ordnance equipment 
could be used to the best advantage by our War Department. Mr. 
Stettinius asked the British for a revision and adjustment of the 
contract, in terms of which the number of guns of small caliber to be 
taken by us were to be reduced, and in lieu of this, the number of 
large-caliber guns slightly increased. A tentative understanding in 
general terms had been reached between Mr. Stettinius and the 
British ministry when the chairman of the Commission took up the 
case. At the conferences held in March, the chairman reached a 
tentative agreement which was presented to and approved by the 
full Commission in Paris a few days later. This agreement was con- 
firmed by the chairman's letter to the British representative, dated 
March 21, 1919, setting forth the number and types of artillery units 
and ammunition, the delivery of which America agreed to accept 
and for which it agreed to pay on the basis of cost to Great Britain, 
in lieu of the payment of cancellation damages. It was further 
agreed that deliveries might begin at once in order to relieve the con- 
gestion at British arsenals and manufacturing plants and in order 
to utilize available shipping, and that a final contract would be pre- 
pared and executed as soon as the definite unit costs could be pro- 
cured by the British and verified by the ordnance representatives of 



22 The entire course of those negotiations is very carefully recorded in two type- 
written volumes in the Commission's files entitled, respectively : (1) " R6sum6 of negotia- 
tions conducted by Mr. Edward R. Stettinius with the French and British Governments " ; 
and (2) " Rfeum6 of negotiations conducted by the United States Liquidation Commis- 
sion — War Department with the British Government for the settlement of obligations of 
the United States consequent upon the purchase of artillery and artillery ammunition, 
Paris, Aug. 28, 1919." 



UNITED STATES LIQUIDATION COMMISSION. 



45 



the American Expeditionary Forces. The formal contract • was 
signed August 9, 1919.-^ 

Under the terms of this contract, Great Britain has delivered, or 
will deliver, to the United States the following guns, gun equipment, 
and artillery ammunition : 



GUN EQUIPMENT. 



Nature. 



Cost per unit. 


Number 
of units. 


£ 


s. d. 




6,295 





84 


6,390 





64 


6,374 





100 


2,060 





50 


5,210 





200 



Total 
value. 



8-inch howitzer, Marie VII 

8-inch howitzer, Mark VI 

6-inch gun, Mark XIX 

6-ineh gun bodies complete with breech mechanisms 
60-pounder gun •. 



£528, 780 
408,960 
637, 400 
103,000 

1,042,000 

2,720,140 



GUN AMMUNITION. 



8-inch high explosive 

6-inch gun high explosive. . 

Shrapnel 

60-pounder high explosive . 

Shrapnel 

High explosive 

Shrapnel 



Total 

Grand total. 



£. s. d. 

13 10 

9 15 

10 5 

6 

6 3 4 

5 5 

5 10 



1 170,000 
125,000 
125,000 
= 33,500 
2 33,500 
166,500 
166,500 



£2,295,000 
243,750 
256, 250 
201,000 
206,583 
349,125 
365, 750 



3,917,458 



'■ Compt. 



- Com. rds. 



America pays no indemnities for cancellation of the original artil- 
lery and artillery ammunition contract of October 19, 1918, but pays 
actual cost for the guns and ammunition purchased under the terms 
of this settlement of i^ugust 9, 1919. The total payment has been 
finally determined at £6,637,598. When the contract was 'signed 90 
per cent of this amount was paid in cash, 5 per cent additional will 
be paid upon the completion of deliveries of the' guns and ammuni- 
tion, and the remaining 5 per cent upon the completion of deliveries 
of the spare parts. 

AUSTRALIAN WOOL SETTLEMENT. 

During the war the British Government made contracts with the 
governments of Australia and New Zealand for large supplies of 
wool produced by them. This was obviously done with a view to 
financing and stimulating production when shipping was precarious 
and when the Allied Governments were in great need of wool. In 
October, 1917, our War Departmet contracted with the British Gov- 
ernment for the purchase of 247,000 bales of wool for delivery in 

25 See Appendix XVIII for copy of (1) the final artillery and artillery ammunition con- 
tract of settlement with Great Britain, dated Aug. 9, 1919, together with (2) the covering 
letter written by the Commission's chairman. 



46 UNITED STATES LIQUIDATION COMMISSION. 

Australia during the summer of 1918, In the late summer and early 
fall of 1918 negotiations were opened in London for the purchase 
by America of additional wool, and on November 7, 1918, a contract 
was signed in London between Great- Britain and America (the lat- 
ter acting through Messrs. Summers and Patterson, of the War In- 
dustries Board) whereby Great Britain sold to America 325,000 addi- 
tional bales of Australian wool. 

The entire amount purchased under the first contract had been 
shipped to the United States during the war and approximately 
115,000 bales had been delivered under the second contract before 
this Commission came into the situation. The Commission found 
that with the coming of the armistice the War and Navy Depart- 
ments of the United States had stocks of wool not only in excess of 
their own needs but in excess of the requirements of our civilian 
population and in excess of what our markets could advantageously 
absorb at that time. The chairman of the Commission, therefore, 
accompanied by Mr. Cuthell, visited London, and in conference with 
Lord Inverforth, minister of supplies. Sir Arthur Goldfinch, British 
wool expert, W. T. Layton, and others, urged that America be 
relieved of its obligation to accept the remaining 210,000 bales under 
the contract of November 7, 1918. The British representatives were 
very insistent that America should take and pay for this wool with- 
out delay. 

Upon studying the contracts and correspondence connected with 
the whole series of wool transactions, some ambiguities were discov- 
ered. The British Government had two schedules of prices at which 
it sold wool — one the " civil issues price," upon which it made a 
profit to cover the risk it was taking, overhead and other expenses; 
the other the "military price," designed to represent cost to Great 
Britain, and at which wool was issued to the British Army. Sir 
Arthur Goldfinch, who had negotiated the sales in behalf of Great 
Britain, insisted with great earnestness that the contracts provided 
in substance that America should pay for all of the wool purchased 
by it at the civil issues price, and that it was proper that America 
should so pay because she did not participate with Great Britain in 
the risk of the purchase of the entire clip. On the other hand, the 
chairman, without admitting the construction placed on the con- 
tracts by Great Britain, earnestly contended that even if the British 
construction of the contract was correct. Great Britain should not 
insist on the terms of the contract which would result in its making 
a profit out of America on wool purchased for war purposes, and in 
furtherance of the cause in which Great Britain and America had 
joined forces. 

As a result of these conferences and debates, which consumed the 
better part of two days, and in which Mr. Cuthell and Mr. Elliott 



UNITED STATES LIQUIDATION COMMISSION. 47 

(the latter being the wool expert of the Purchase, Storage and Traffic 
Division of the War Department) participated, an agreement was 
reached substantially as follows: ^* 

1. America agreed to pay for all of the wool purchased under the 
contract of October 1, 1917, on the basis of the civil issues price less 
2^ pence a pound, in accordance with bills already rendered, cover- 
ing approximately 247,000 bales. 

2. America agreed to pay the bills rendered by Great Britain for 
storage and insurance in Australia, and for interest on delayed paj^- 
ments under this contract, amounting approximately to $850,000. 

3. America agreed to pay for the 115,000 bales already shipped 
under the contract of November 7, 1918, on the basis of the civil 
issues price less 2^ pence a pound in accordance with the bills already 
rendered, plus a payment of 1 penny per pound j)remium for selec- 
tion in accordance with the terms of the contract. 

4. Great Britain cancelled without cost to America all obligations 
on our part to take delivery of that portion of the wool which 
remained undelivered under the contract of November 7, 1918, 
amounting to approximately 210,000 bales. 

5. Great Britain waived all claims for interest and storage against 
America covering the wool undelivered under the contract of Novem- 
ber 7, 1918. 

This was believed by all interested parties to have been a most 
advantageous contract from the American point of view. It re- 
lieved the War Department of an obligation to take a large amount 
of wool for which it had no use and which American markets were 
unable to absorb within any reasonable time, and for which America 
would have been required to pay in cash approximately $38,800,000. 

THE CUTHELL SETTLEMENT. 

As heretofore pointed out, Chester W. Cuthell, special repre- 
sentative of the Secretary of War, and his staff were responsible for 
the development and presentation of claims of the War Department 
against Allied Governments arising in America. How thoroughly 
and effectively this work was done by Mr. Cuthell and the members of 
his staff is illustrated by the manner in which they presented, in 
May, 1919, to the British authorities in London and procured allow- 
ances of five controverted claims aggregating in amount over 
$35,000,000. While the chairman of the Commission participated in 
these conferences and the contract of settlement was ratified and ap- 
proved by a vote of the Commission, it is nevertheless the privilege, 
as well as the pleasure, of the Commission's chairman to bear testi- 
mony to the fact that the full credit for the preparation and estab- 

=^ See Appendix XIX for the Australian wool settlement, which is paragraph 6 of the 
Cuthell settlement with Great Britain, dated May 10, 1919, signed by C. W. Cuthell 
and Lord Inverforth. 



48 UNITED STATES LIQUIDATION COMMISSION. 

lishment of these claims belongs to Mr. Cuthell and the members of 
his staff. 

After conferences lasting for only a little more than a week, 
these claims, as presented to Great Britain, were established and 
allowed as follows : ^^ 

Spruce, fir, and cedar $13,274,550.20 

Wood distillates 2, 887, 554. 00 

Liberty motors 13, 964, 718. 90 

Nitfocelliilose powder 4, 690, 500. 00 

Cotton linters 651,500.00 

35, 468, 823. 10 
SETTLEMENT OF TANK AGREEMENTS. 

In the fall of 1917 Great Britain and the United States appointed 
a joint commission to study the question of the most desirable types 
of tanks and the question of their production. A conference was 
held in Paris in December, 1917, the United States being repre- 
sented by Col. House and others, England by Mr. Churchill and 
others, and France by M. Loucheur and others. 

At this conference the desirability of producing heavy tanks on 
a large scale, the jjarts to be made in the several countries and the 
assembling plant to be built in France, was discussed at length 
and agreed to in principle. France, however, because she was 
already producing light tanks in great quantities, declined to enter 
into a triangular agreement for financing and forwarding such a 
proposition, but she agreed to assist the other two nations in acquir- 
ing a site for the assembling plant and in other ways within her 
power. She did not ask for any part of the output of the plant at 
this time. 

On the 22d of January, 1918, an agreement was signed between the 
United States and the British Government, creating an Anglo- 
American commission, which was charged with building a tank- 
assembling plant in France with a capacity of 300 tanks per month 
and capable of being extended to 1,200 per month; 1,500 tanks to be 
produced during the year 1918. This assembling plant was built 
at Chateauroux, Neuvy-Pailloux, and is usually spoken of as the 
" Chateauroux plant." The component parts of the tanks were to be 
produced about half in England and half in the United States, Eng- 
land supplying plates, structural members, track shoes, guns, ammu- 
nition, etc., and the United States supplying engines complete, motor 

=s Copy of Cuthell-Inverforth agreement, together with an explanation of the matters 
involved in this settlement is found in Mi\ Cuthell's report to the Secretary of War, dated 
Sept. 30, 1919, v?hich is quoted in full in the Annual Report of the Secretary of War, 
1919, pp. 105, 106, 117-120. 



UNITED STATES LIQUIDATION COMMISSION. 49 

parts, sprockets, hubs, shafts, track rollers, track lengths, etc. The 
expenditures of the entire undertaking, including the building of 
the factory in France, the production of the components, and all 
other matters directly connected with the work, were to be shared 
equally by the two Governments. Completed tanks were to be sold 
to the French, British, or Americans at £5,000 each, this price being 
subject to adjustment when the project should be liquidated at the 
close of the war. After the undertaking was well under way, 
France, through the Interallied Munitions Council, earnestly in- 
sisted that the cause of the Allies required that the majority of the 
large tanks to be assembled at the Chateauroux plant should be allo- 
cated to her. xA.fter much discussion, it was reluctantly agreed that 
France and the United States should share equally the tanks as pro- 
duced until the first 1,200 had been finished and that the next 300 
should be allocated to France. This understanding was never re- 
duced to writing as a formal agreement, nor was any agreement 
•ever made with regard to the allocation of tanks in excess of the first 
1,500 to be produced. 

The Chateauroux plant was never quite finished and no tanks were 
ever assembled there. Immediately after November 11, 1918, work 
on the whole project was discontinued and conversations began with 
a view to reaching a settlement in liquidation of the affairs of this 
enterprise. Approximately 24,000,000 francs had been expended on 
the erection of the assembling plant for substantially one-half of 
which the United States was indebted to Great Britain. The amount 
which the United States and Great Britain had each expended in 
the manufacture of components has been estimated as approximately 
£3,000,000. France had invested nothing in the enterprise, although, 
as noted above, she was to receive nine- fifteenths of the first year's 
output. 

The liquidation of this undertaking was discussed by the Com- 
mission's chairman and Mr. Stettinius with the representatives of 
the British Government in London early in March, 1919, and a 
tentative agreement in general terms was reached. This agreement 
was reduced to writing, and formally executed under date of 
August 8, 1919.2« 

The contract provided that the losses sustained by the two Govern- 
ments in the manufacture of tank components should be considered 
as offsetting each other, and that neither Government should bill the 
other, nor bill the Anglo-American Commission for any of them. 
The cost of erecting the assembling plant, and all expenses in connec- 
tion with that undertaking were shared equally between the two Gov- 

2" See Appendix XX for a copy of the " Chateauroux tank agreement " of Aug. 8, 
1919. 

183176—20—4 



50 UNITED STATES LIQUIDATION COMMISSION. 

ernments. Nothing remained, therefore, to complete the liquidation 
save the disposition of the assembling plant, and the presentation to 
France of the equitable claim growing out of the allocation to her ot 
nine-fifteenths of the first year's production. It was believed by 
Great Britain and the United States that the most satisfactory form 
in which to present this claim to France was to ask her to purchase 
and take over the plant with all rights and obligations pertaining to 
it and pay on the transaction a sum sufficient to cover the purchase 
price, and such share of the general loss as might be determined to be 
equitably chargeable to France. 

It might seem fair, at first blush, for the proceeds of this sale to be 
divided equally between Great Britain and the United States because 
the two Governments had shared equally in all the expenses of con- 
structing the plant. Great Britain, however, contended with much 
plausibility that because she had relinquished to France her allocation 
of 750 tanks (one-half of the first year's output), and because 
America had relinquished only 150 tanks; the major portion of the 
payment from France should go to England, in so far as it was a con- 
tribution to the general loss, and not a payment for the value of the 
plant. 

Without settling the point with England concerning the division 
of the proceeds, the Commission joined with the representatives of 
Great Britain in presenting the claim, through M. Loucheur, to the 
French Government. M. Loucheur, in his answer, argued that the 
French understanding of the whole tank situation was that, while 
the English and American Governments had been planning to con- 
centrate on the production of heavy tanks, the French Government 
was making large expenditures in concentrating on the production of 
light tanks, and that, while the French Government would have re- 
ceived heavy tanks from the Anglo-American Commission, both the 
English and American Governments would, in turn, have received 
light tanks from the French Government. He contended further 
that no more definite agreement had been reached to the effect that 
France should get heavy tanks than to the effect that England and 
America should get light tanks; that the moral force of one claim 
was as strong as the other. 

After this answer had been carefully examined by the representa- 
tives of Great Britain and by this Commission, negotiations were 
re-opened with M. Loucheur, which finally resulted in an agreement 
by the French Government to pay 20,000,000 francs in settlement of 
the claim, France taking over the Chateauroux plant with all rights 
and liabilities relating thereto at the time of the contract. It was 
estimated that the net salvage value of the Chateauroux plant was 
6,000,000 francs, so that 15,000,000 francs might be considered as in- 



UNITED STATES LIQUIDATION COMMISSION. 51 

demnity paid by the French as their share of the losses connected 
with the undertaking. 

It was clear that England was entitled to a larger share of this 
indemnity than the United States, because she was to receive no tanks 
during the first year of the plant's operation, having relinquished 
her entire share to the French. Of the 900 tanks which France 
would have received from the first. year's production, England would 
have contributed 750, or five-sixths, and America 150, or one-sixth. 
England contended that while it was proper to divide the 5,000,000 
francs equall}^ between the two Governments, the 15,000,000 francs 
should be divided five-sixths to England and one-sixth to the United 
States. The Commission finally agreed with Great Britain that the 
20,000,000 francs received from France should be divided, 70 per 
cent, or 14,000,000 francs, to Great Britain, and 30 per cent, or 
6,000,000 francs to the United States. On October 4, 1919, a final 
contract was signed with Great Britain providing for a complete 
liquidation of the affairs of the Anglo-American [Tank] Commission, 
and providing in detail for a distribution of funds and settlement 
of account.^ 

Another matter arose in connection with this settlement. It will 
be remembered that under the Anglo-American agreement certain 
tank parts were being made in the United States and other parts in 
England while shipments were to be made to France where the 
tanks would have been assembled. Our War Department in Wash- 
ington decided that it would be desirable to use some of the com- 
ponents already produced under this agreement for the manufac- 
ture of tanks for training and educational purposes. The British 
Government was approached by the chairman of the Commission and 
it consented to turn over to us, at a salvage price, tank parts suf- 
ficient to enable us to produce 105 tanks. England estimated that 
her share of the components for one tank had cost about £5,000, 
but because tank components had little more than salvage value to 
her after the war she was glad to offer America these parts at 
slightly over £1,000 per tank. The total bill for this purchase 
amounted to £105,786 7s.'' 

There was one more tank transaction which remained to be settled. 
Some time before November 11, 1918, Great Britain had supplied to 

2^ See Appendix XXI for (1) a copy of the contract of final settlement of the 
Chateauroux tank project, dated Oct. 4, 1919: (2) a copy of memorandum prepared by 
M. Loucheur and signed by Loiicheur and Morel, on behalf of the French Government ; by 
C. C. Barry and F. W. Phillips, on behalf of Great Britain ; and by Edwin B. Parker, on 
behalf of the United States, dated Oct. 9, 1919_ 

2«A full account of all the negotiations carried on in connection with the settlement 
of the Anglo-American agreement is contained in a typewritten volume in the Commis- 
sion's files, styled " R6sum6 of negotiations conducted by United States Liquidation 
Commission with the British and French Governments in the final settlement of the 
Anglo-American agreement and the purchase of British tank components," dated Paris, 
Auff. 28. 1919. 



52 UNITED STATES LIQUIDATION COMMISSION. 

the 301st Tank Battalion, United States Army, 64 tanks of various 
marks, complete with armament and equipment. These tanks were 
used in fighting while this battalion was brigaded with the British 
Army, The British supplied spare parts -as they were needed. After 
the war, 14 of these tanks were shipped to the United States and 
the remaining 50 were returned to Great Britain. A portion of 
them had been damaged in action. .The Commission agreed, by a con- 
tract dated August 11, 1919, that the United States should keep the 
14 tanks, the British should keep the 50 tanks, and that the whole 
matter should be settled by a payment to Great Britain of £189,233 
2s. lid. 

BRITISH LIBERTT MOTOR SETTLEMENT. 

Under the Cuthell-Inverforth agreement of May 10, 1919,-^ the War 
Department of the United States was obliged to continue its deliveries 
of Liberty motors to England until the total should reach 2,252 
motors. These deliveries were completed out of the surplus Liberty 
motors which we had in our possession in France and which were 
not needed to satisfy our obligation under the final aircraft settle- 
ment with the French Government. 

BRITISH INTEREST CLAIM. 

Prior to the creation of the Commission, the British Government 
had presented to the American Expeditionary Forces a claim for 
interest on money invested by the British in stocks which had been 
sold afterwards to the United States at cost and also a claim for 
interest on bills payment of which had been delayed more than one 
month. These claims had already been tentatively recognized by 
the American military authorities and were among the first im- 
portant matters with which the Commission was called upon to deal, 
the chairman making his first examination of them during his visit 
to London early in March. 

The British claimed that interest on investments made by them in 
stocks afterwards sold to us should begin to accrue from the date of 
the investment by the British in such stocks irrespective of the date 
of the bill or invoice. The Commission in numerous prolonged con- 
ferences protested against payment of interest for any period previ- 
ous to the presentation of a proper bill. 

The position which the British took was that our contention would 
be sound under ordinary conditions, but that the exigencies of war 
made conditions abnormal, and that they ought not to lose the interest 
on capital which they had invested for us merely because they had 

^ See Appendix XXII for the text of section 3 " Liberty motors and proper proportion 
of sets of spare parts " of the Cuthell-Inverforth agreement of May 10, 1919. 



UNITED STATES LIQUIDATION COMMISSION. 53 

not paused in the process of waging war for the purpose of rendering 
bills. They claimed that, if America was unwilling to consider inter- 
est from the date of the investment by the British, at least we should 
pay interest from the date of delivery. They further pointed out 
that, during all of this time, they were borrowing money from 
America and paying interest on it from the date when the credit 
was extended, and that an important part of this same money had 
been paid out for the very materials and supplies which they had 
delivered to us. 

Numerous objections to this claim were put forward by the Com- 
mission and it would not be profitable to rehearse them here. It is 
enough to say that the fact was clearly developed that there had 
been unreasonable delays by each party in the payment of bills. 
The British finally abandoned their claim for interest on invest- 
ments covering periods prior to the rendition of bills; and it was 
finally agreed that interest at the rate of 5 per cent per annum should 
be paid by each party on every proper bill which had been rendered 
by the other and which had been held for a period longer than a full 
calendar month without payment, interest' beginning to accrue on 
the first day of the second month following receipt of the bill. 

Careful studies were made of all bills rendered by either party 
prior to July 31, 1919, and a summary of these bills was prepared. 
A balance was struck showing that the British bills against America 
exceeded the American bills against the British by £51,062,692 15s. 
5d. It was also calculated that the average period during which 
all of these British bills had been held unpaid after they had been 
presented in proper form was five and one-fourth months. An 
average period of one and one-half months being allowed as a 
reasonable time for checking and vouchering, it was agreed that in- 
terest should be computed at 5 per cent per annum for a period of 
three and three-fourths months on £51,062,692 15s. 5d., and the re- 
sult, namely £797,854 lis. 2d., should be paid by America to Great 
Britain in full, final, and complete settlement of all mutual interest 
claims of this nature accruing from the beginning of the war to 
and including July 31, 1919. This sum has been paid.'" 

The contract of settlement further provides that interest at the 
rate of 5 per cent per annum shall begin to accrue October 1, 1919, 
on all bills rendered prior to August 1, 1919, and which have not been 
paid on October 1, and, further, that all bills rendered in the month 
of August which have not been paid before October 1 shall bear in- 
terest from the latter date and that on November 1 interest shall 
begin to accrue on all bills rendered during the month of September 
which have not been paid before November 1. This formula is to be 



•o See Appendix XXIII for copy of the contract settling tlie interest claims betwe en 
the British and American Governments, dated Oct. 20, 1919. 



54 UNITED STATES LIQUIDATION COMMISSION. 

followed until all mulual bills and accounts between Great Britain 
and the United States growing out of the war have been paid. It 
will be noted that this plan allows an average period of 45 days for 
checking and vouchering bills before interest begins to run. 

Bills are not "rendered" for the purpose of this contract until 
they are presented in a correct and proper form, i. e., the form in 
which they are ultimately paid. A bill which is delayed in pay- 
ment on account of being returned for correction is not " rendered ■' 
until presented again in correct form. 

It may be of interest to note in passing that measures were taken 
hy the Commission to insure the prompt payment by the American 
forces of all proper bills rendered b}'^ the British against them and 
that practically no interest is accruing at this time nor has any ac- 
crued for some months past. It is also interesting to note that, by 
force of circumstances for which neither government is censurable, 
America has gained very much more by reason of the decline in the 
rate of exchange than she has lost by the payment of interest for any 
periods of delay. 

LIQUIDATIOK OF THE NITRATE POOL. 

In the early part of 1918 America agreed with Great Britain, 
France, and Italy that the purchase of nitrate of soda, which was 
required in large quantities by these Governments for use in the 
manufacture of powder and explosives, should be allocated through 
a " nitrate executive " stationed in London. The world's supply of 
nitrate of soda is located in a small area near the coast of Chile, and 
its export is controlled by the Chilean Government. Purchases were 
made from time to time by or for account of the respective Govern- 
ments, or for importers under allocations made in London by the 
nitrate executive. 

Immediately after the armistice all importations from Chile to 
the United States were stopped, and the War Department took ac- 
count of its stocks. It turned over 192,000 tons to the Department 
of Agriculture for sale and use in the production of soil fertilizers. 
It placed 300,000 tons in War Department reserve. After these dis- 
positions it was calculated that the surpluses remaining, including 
a small Navy Department surplus, were something over 28,000 tons 
in the United States and about 120,000 tons in Chile. 

Early in December, 1918, a tentative understanding was reached 
between the British ministrj?^ of munitions and the American War 
Department for the formation of a pooling arrangement, according 
to which the surplus stocks of nitrate held by the two Governments 
might be disposed of. The terms of this understanding were not 
well defined, and when the matter was taken up with the British 
representatives by the chairman of the Commission on his visit to 



UNITED STATES LIQUIDATION COMMISSION. 55 

London early in March the British were not prepared to admit that 
a real " pool " had been formed. After some conversation, however, 
the existence of the pool was admitted in principle. 

There were several difficulties in the way of a prompt disposition 
of the stocks and conclusion of the affairs of the pool. The stocks 
were widely scattered. Some of them were in Chile, some in the 
United States, some in Great Britain, and some in Canada. It was 
difficult to get accurate information about their exact amounts and 
exact locations. More than one department of both Governments 
was interested in the disposition. Much delay was incident to the 
exchange of cables between London, Chile, Canada, Washington, and 
the Commission. 

Finally, after numerous and prolonged conferences, a contract of 
settlement of the entire controversy was executed as of September 15, 
1919, and delivered on October 29, 1919.^^ This agreement provides 
that the pool shall be construed to exist to the extent of participa- 
tion — 

Tons. 

By the British Governnient, with stocks of 436,628 

By the Unitorl States Government, with stoclis of 157, 396 

Maldng- a total of .594,024 

Of this amount 226,173 tons remained unsold on September 15, 
1919. This unsold surplus is bought by each Government from the 
" pool " under the terms of the contract, the quantity purchased by 
each being in a ratio equal to the ratio of the two contributions. The 
price to be paid by each Government and credited to the " pool " is 
8s. 6d. per quintal (22 quintals equal 1 long ton) for refined nitrate 
and 8s. 2d. per quintal for ordinary nitrate, plus $17.50 per ton for 
ocean freight to the United States and 140s. per ton to England, and 
plus marine insurance charges. The stocks allocated to America in 
this sale consist of 28,376 tons located in the United States, 16.598 
tons located in Canada, and 14,951 tons located in Chile, or a total 
of 59,928 tons. The stocks allocated to Great Britain consist of 
58,468 tons located in the United Kingdom and 107,245 tons located 
in Chile, or a total of 165.713 tons. The profits and losses of the pool 
are to be apportioned between the two Governments according to the 
ratio of their contributions of nitrate as set down in the schedule 
above. 

Deliveries are now being made under these allocations. When they 
are complete it will be necessary to make some adjustments in accord- 
ance with the terms of the contract of September 15, 1919, above 

31 See Appendix XXIV for a copy of the contract of liquidation of the nitrate pool, 
together with a memorandum of the revised figures which have finally been used as the 
basis for the allocation of the stocks. See also minutes of Commission meeting held Dec. 
3, 1919, Minute Book, p. 452. 



56 UNITED STATES LIQUIDATION COMMISSION. 

mentioned, and then a final statement can be prapared and the liqui- 
dation completed. This pooling arrangement as finally consummated 
will prove advantageous to America. It is quite important that the 
final accounting should be done by the War Department through a 
representative who is thoroughly familiar with the whole series of 
transactions. The Commission's files contain a complete record, but 
it is voluminous. 

BILLS, ACCOUNTS, AND CLAIMS PENDING IN GREAT BRITAIN. 

Nearly all the bills, accounts, and claims of America against Great 
Britain growing out of the war, whether they arose in the United 
States, England, France, or elsewhere, have been presented and finally 
disposed of. There still remain, however, a fairly large number of 
bills to be presented by Great Britain against America arising out 
of transactions both in England and in France. It is roughly esti- 
mated that these bills will aggregate £5,000,000 at this time. The 
Commission has continuously brought pressure to bear upon the 
several departments of the British Government to induce them to 
present these bills in order that a full, final and complete mutual 
settlement of all transactions between the two Governments growing 
out of the war might be concluded. It is believed, however, that 
while a large number of these bills and claims have been presented 
and disposed of, they will perhaps not all be rendered for several 
months to come. The British representatives have assigned, as the 
reason of this delay, the constant changes and wholesale reductions 
in the personnel of their several departments. 

There are three unliquidated claims of Great Britain against 
America for very substantial amounts which are still pending. These 
have not yet been presented to the Commission in anything like com- 
plete form. They are still being studied by British representatives, 
who state that they expect at an early date to be in a position to 
present them with data, evidence, and arguments in their support. 

EXCESS COSTS CLAIM. 

The most important one of these pending claims has come to be 
known as the " excess costs " claim, or the claim for " hidden loss 
on steel." During the series of interviews which the chairman of 
the Commission had with the British officials early in March, 1919, 
notice was informally given that it was their intention to present a 
claim for excess cost of steel, and that the basis of this claim was 
the fact that the British had billed America for steel products, 
especially artillery and artillery ammunition, using the artificially 
low price which had been fixed by the British Government for the 



UNITED STATES LIQUIDATION COMMISSION. 57 

issuance of steel to their manufacturers, termed by them "manu- 
facturers' issues price." The British stated that these bills against 
America did not take into account subsidies and other elements of 
cost which their government had paid directly or indirectly for the 
steel. They also stated that it had become necessary for them to 
purchase steel in America at a price not only higher than their 
government-fixed price but higher than the actual cost of steel in 
England, in order that they might be able to supply the United 
States with products of which steel formed a large constituent part. 

In concluding the several artillery, ammunition, and tank agree- 
ments referred to above, the rights of Great Britain arising under 
this "excess costs" claim were specifically reserved without preju- 
dice to either party. 

On August 1, 1919, the British presented their first written state- 
ment of this claim, showing the amount involved according to their 
accounting to be approximately £3,770,000. Among other conten- 
tions put forth by them in support of the claim, one was to the effect 
that, in all America's purchases from Great Britain of finished 
articles of which steel formed a constituent element, America had 
originally promised to replace the steel ton for ton in Great Britain. 
They said that the stocks containing steel had been sold in great 
quantities to America and billed on the basis of the British fixed 
price of steel to manufacturers; that, the price of steel in America 
being much higher than it was in England, America was liable to 
Great Britain for the difference between these two prices on all 
steel purchased by the latter country in the United States because 
such purchases were necessary to replace the steel contained in prod- 
ucts furnished to America. They have sought to apply here the prin- 
ciple that, in cases of reciprocal supply, neither nation ought to make 
a profit nor sustain a loss. In this case they insist that they have 
lost money on all steel products furnished to America on the basis 
of the bills already rendered. 

The Commission has answered in part that the " replacement ob- 
ligation " did not, and was never intended to, control or affect prices^ 
but was entered into as a measure of insurance to Great Britain that 
she would secure steel tonnage from America at least equal to the 
steel entering into the products sold by Great Britain to the United 
States. When this replacement arrangement was agreed to neither 
party was greatly concerned about prices, but both were very much 
concerned about the allocation of bottoms for steel, because all of 
the Allies were in great need of tonnage. It was further pointed 
out that the replacement obligation had been entirely cancelled, with- 
out reservation or condition, by the agreement concluded between the 
representatives of America and Mr. Churchill, British minister of 
munitions, in October, 1918, 



58 UNITED STATES LIQUIDATION COMMISSION. 

The Commission took the position, however, that it was the wish 
and purpose of America to compensate Great Britain for every proper 
element of cost which could be definitely assigned to products sold to 
America by the British. With this in view the British representatives 
undertook to ascertain (1) the average loss on all steel which the 
British Government furnished to British manufacturers during the 
year preceding November 11, 1918, the calculation being based on the 
difference between government prices to manufacturers and actual 
cost to the government, taking into account every direct element; 
(2) the amount of such steel which has entered into products sold to 
America by Great Britain; and (3) the hidden loss to the British on 
all steel furnished to America as estimated in this way. 

Such a calculation was made, and a memorandum setting forth the 
items making up the costs was presented to the Commission by the 
British representatives on November 10, 1919. This memorandum 
furnished the basis of several conferences at which the Commission 
pointed out that some of the items of alleged loss were too remote 
and indirect in their nature to be considered as " costs." An example 
of such indirect charges was an item covering bonuses paid by the 
British Government to manufacturers of silica brick, for the pur- 
pose of stimulating their production, that the brick might be used in 
the building of furnaces for the production of steel for the manu- 
facture of shells, some of which were sold to America. The Commis- 
sion pointed out how impracticable it would be for each Govern- 
ment to trace every remote and indirect element of cost which had en- 
tered into the production of materials furnished to the other. Atten- 
tion was called to the fact that, under the principle which Great 
Britain was seeking to apply here, she might ask America to par- 
ticipate in the subsidy which she had paid on the bread which the 
workers in her steel mills had eaten. Another point which has been 
urged by us is that Great Britain has not included any item of credit 
to America for the large smns collected by her in the form of excess 
profit and war profit taxes from her steel manufacturers. 

The British have urged that both France and Italy have already 
recognized the justice of the principle for which they are contending, 
because these countries have paid to Great Britain two sets of bills 
on all their purchases of steel products. One set covers straight cost 
to the manufacturers, the other, or supplemental, set was based on the 
price paid by Great Britain for American steel and represented a 
" hidden loss " of the character described in the claim which they are 
now presenting against us. 

The British representatives are making additional studies of this 
claim in the light of the objections which we have urged, and they 
promise to present it again in revised form. 



UNITED STATES LIQUIDATION COMMISSION". 59 

OVERHEAD EXPENSE CLAIM. 

Another important claim which is still pending is called the " over- 
head expense claim." This matter arises out of a general claim by 
the British Government for reimbursement for certain expenses such 
as inspection, storage, handling, transportation, and insurance, con- 
nected with materials which the British Government bought for us 
from its own nationals or sold to us from its own stocks. The British 
claim that there have been expenses, in addition to the face of bills 
rendered by nationals, connected with handling this material in our 
behalf between the time when it left the contractor and the time 
when it came into the hands of the American Army. The problems 
arising in connection with these so-called " overhead charges " have 
been solved and all claims adjusted with the British ministry of 
munitions. 

With the British war office, however, the matter is still unsettled. 
From July 29 to August 30, 1919, the overhead expense items in war 
office bills were allowed. But, during August, the war office gave 
notice that they intended to add 4 per cent, or such part thereof as 
might be applicable, to all their overhead expense charged on bills 
previously rendered and on all bills in the future. As it was be- 
lieved that it would require a great amount of unnecessary work to 
audit the overhead expenses, if they were presented in detail by the 
war office; it was agreed that the British might present their claim 
in lump-sum form ; and, as it was thought best to make no payments 
which might interfere with this proposed arrangement, a memo- 
randum was issued on August 30 suspending all payments for war 
office overhead expenses. This memorandum is still in effect. The 
British have presented their lump-sum offer in tentative form, and 
the total claim amounts to nearly £1,000,000. The Commission has 
made it clear to the British representatives that some of the items of 
this claim can not be considered because they are too indirect ; such 
items for example as pertain to Government administrative expenses 
or interest on capital investments. Other items are believed to be 
proper charges against America and should be allowed when they 
are suitably presented and established. 

SUPPLEMENTAL CLAIM FOR RAILWAY TRANSPORTATION. 

America has paid Great Britain for the railway transportation 
of troops and supplies at her established military rates, payments 
being made when and as the services were rendered. During the 
war Great Britain made certain guaranties of income to her railroads 
under which she is now being called upon to pay substantial sums. 
A short time ago she reached an agreement with her railroads in 



60 UNITED STATES LIQUIDATION COMMISSION. 

terms of which there is an increase in the military rates for the 
transportation of troops and supplies, this increase being retroactive 
to the extent that it applies from April 1, 1919, forward. The sug- 
gestion has been made that the British now render supplemental 
bills against America on the basis of these increased rates covering 
all items of transportation of our- troops and supplies since April 
1, 1919. 

The Commission has said to the representatives of Great Britain 
that America can not consider any such claim. It has been pointed 
out that the United States might make an analogous claim against 
Great Britain for the payment of her share of the loss which has been 
sustained by our Government in taking over the operation of our 
railroads during the war period. This share might be calculated by 
determining the ratio of transportation for the British to the total 
transportation in America. Were we to recognize the right of Great 
Britain to bind us by retroactive agreements there might be no limit 
to the liabilities which Great Britain might incur for our account 
in revising contracts for munitions, supplies, and services and in 
other ways. Likewise if the United States should begin all over 
again to calculate the exact cost to her of everything which she has 
procured from her own nationals in behalf of Great Britain every 
settlement which has been made would have to be revised. 

CONTRACT CLAIMS OF NATIONALS. 

During the war it became necessary for the American Expedition- 
ary Forces to enter into contracts for the purchase or manufacture 
of war supplies with the nationals of France, England, Italy, Spain, 
Portugal, and Switzerland. A large number of these contracts were 
active when the armistice was signed, and for the most part these 
were promptly cancelled in whole or in part according to the state 
of production and the extent to which the products would be used 
by the American forces. The cancellation of these contracts in 
most instances necessarily involved losses to those with whom they 
had been placed; but, as the resulting damages were unliquidated 
in their nature, there was some doubt as to the right of the several 
services of the American Expeditionary Forces, or of the War De- 
partment, to settle same. This doubt was removed by Congress 
when it passed the act of March 2, 1919, conferring broad powers 
upon the Secretary of War, and through him upon the Commission, 
to make equitable adjustment of all such claims. 

Searching and painstaking investigations were made through the 
several services which had negotiated the contracts of manufacture 
and purchase in the first instance, and their reports were in turn 
reviewed and frequently supplemented by the Chief Finance Officer, 
who in turn transmitted the files to this Commission, where they 



UNITED STATES LIQUIDATION COMMISSION. 61 

were again subjected to a careful examination and frequently were 
the subjects of conferences between the claimants, the chiefs of the 
services interested, the Finance Officer, and members of the Commis- 
sion or of the Commission's staff. It became necessary from time 
to time for the Commission to send claims back for re-investigation, 
re-study, and re-consideration, and in several cases, notably those 
arising in Switzerland and Spain, special representatives were sent 
by the Commission to make first-hand investigations and reports. 

There were in all allowed 446 claims for cancellation of contracts, 
besides a number of disputed bills payment of which the Commission 
authorized. Indemnities have been paid in the currencies of the 
various nations where the matters arose and the rates of exchange have 
varied. Almost everywhere the rate has been considerably below par. 
The total amount claimed, expressed in dollars at the normal rate of 
exchange, was $17,427,175.41, while the total payments made, expressed 
in dollars at the normal rate of exchange, amounted to $8,413,984.19. 
There have been 53 contract claims disallowed for various reasons. 
Their total in dollars at the normal rate of exchange would have 
been $739,894.91.^2 

SETTLEMENTS WITH FRANCE. 

FRENCH ARTILLERY AND AMMUNITION SETTLEMENT. 

During the latter part of July, 1918, Edward R. Stettinius, 
then special representative of the Secretary of War, began, in the 
light of the increased military program of the United States, to 
negotiate with the French and British Governments for increased 
allotments of artillery and artillerj'^ ammunition. Numerous esti- 
mates were exchanged between him and the French officials, and 
French production was increased and pressed to its fullest capacity 
in order to meet America's needs. 

While no formal contract was ever entered into between the two 
Governments, and while neither the exact number of guns which 
the French could furnish, nor the exact number of components for 
them which the United States could supply was ever definitely agreed 
upon, there is no doubt that the United States relied upon the French 
to assist them substantially in their artillery program, and that the 
French enlarged their production with this in view. A list of the 
materials and components which America could supply was drawn 
up, and a list of the guns which the French could supply, expressed 
in terms of numbers per month, was prepared. Both lists were cor- 
rected from time to time and a discussion of these figures continued 
until the date of the armistice. In the meantime, however, orders 

^ See Appendix XXV for a chart showing the number of claims settled, the total 
amount claimed in all cases where specific amounts were claimed, the amount allowed 
by the Commission, and the number of claims disallowed. 



62 UNITED STATES LIQUIDATION COMMISSION. 

were regularly given, and stocks delivered by both parties in pur- 
suance of the general understanding.^^ 

It was understood that the price to be paid by America should be 
cost to the French Government. A& the signs of an approaching 
armistice began to be detected, efforts to conclude these arrange- 
ments in a formal contract were halted, but it was always perfectly 
clear that America was obligated to France in regard to the guns 
which the French had in process of manufacture for America. 

Immediately following the armistice, Mr. Stettinius began negotia- 
tions looking to a fair and equitable settlement of these obligations 
to the French, with a view to reducing our investments to a mini- 
mum, yet at the same time getting, in the form of completed artillery 
units, as nearlj^ as possible value received for the money invested. 
In the first conference held with the French authorities it developed 
that France could not, for economic and social reasons, suddenly 
cease production, and that they were inclined to hold us responsible 
for accepting large deliveries. 

Mr. Stettinius took the position, which he steadfastly and con- 
sistently maintained, that the United States ought not to pay for any 
materials which had been produced as a result of continuing the 
operation of French factories beyond the war period in the interest 
of the social and economic welfare of France, and for the benefit of 
her people. The French authorities finally acquiesced in this posi- 
tion and in December, 1918, Mr. Stettinius had in conference with 
M. Loucheur, representing the French Government, agreed in prin- 
ciple upon the terms of a settlement. 

An inventory was made of the guns in process, with percentages 
of completion on the date of the armistice. These figures were re- 
duced to terms of completed guns, and America agreed to accept de- 
livery of and pay for that many guns, orders for all others being 
cancelled, without charge. The artillery ammunition in common 
dumps was to be sorted, America taking all of the American manu- 
facture, and France all of French manufacture. Contracts under 
which the French were to complete shells and load them and con- 
tracts under which America was to furnish empty shells were to be 
mutually cancelled without charge. 

It is believed that the underlying principles of this settlement are 
fair and just to both parties. Certain it is that America has no cause 
for complaint. As soon as the Commission was established the terms 
of this pending settlement were discussed at length by the commis- 
sioners with Mr. Stettinius and measures were taken to apply the 

33 See Appendix XXVI for (1) a catalogue of artillery components to be furnislied 
by United States to France, and (2) a catalogue of guns to be furnished by France to 
United States, as established in the arrangement between Stettinius and Mercier on 
Sept. 19 and 21, 1918. These figures were never greatly changed, and they were actually 
acted upon by the two Governments in order to save time. 



UNITED STATES LIQUIDATION COMMISSION. 63 

principles already tentatively established and to reduce the matter 
to a formal contract, which, however, was not finally executed until 
August 28, 1919.3* 

The terms of this contract may be briefly summarized as follows : 
First. France delivers to the United States — 

(a) 944 75-millimeter gun materials, model 1897, with limbers. 
(h) 700 155-millimeter howitzer materials, model 1917, Schnei- 
der design, with limbers. 

(c) 198 155-millimeter G. P. F. materials with limbers. 

(d) Additional spares as specified. 

France waives all claims for indemnity for the cancellation of 
arrangements for the purchase of artillery components and ammu- 
nition. 

Second. In consideration of such deliveries the United States, 
in the general settlement with France, credits the latter with 
117,501,887.45 francs. 

Under this settlement the United States has acquired artillery units 
of standard types at cost without being required to take and pay for 
an}^ additional ammunition, with which we are already abundantly 
supplied, and without the payment of $1 in the form of cancellation 
indemnities. 

FRENCH AIRCRAFT SETTLEMENT. 

When the armistice was signed, there was being manufactured by, 
or through, the French Government in various factories in France, 
for the use of America, large numbers of airplanes, and large quan- 
tities of aeronautical material under a contract dated May 3, 1918, 
and signed by Gen. Pershing. By the terms of this contract, written 
orders were placed from time to time with the French air ministry, 
which in turn allocated them to particular French factories. The 
price to America was to be the same as that paid by the French 
Government for similar articles contracted for at the same time and 
on similar terms ; or, if there were no such contracts, then it was to 
be the same as the price on current contracts of the French Govern- 
ment for similar articles plus, in either case, 5 per cent for inspec- 
tion, supervision, and other overhead expenses. The contract would 
have expired on June 30, 1919, and it provided for the delivery of 
a certain number of planes each month. It contained no cancella- 
tion clause, but the French Government had a cancellation clause in 
each of its contracts with the manufacturers. 

On November 11, 1918, the American Air Service wrote to the 
French air ministry giving informal notice of cancellation of all 
orders for aeronautical materials, and negotiations were at once 



s* See Appendix XXVII for copy of (1) French artillery and artillery ammuniUon 
contract dated Aug. 28, 1919, and (2) supplement to French artillery and artillery 
ammunition contract dated Nov. 20, 1919. 



64 UNITED STATES LIQUIDATION COMMISSION", 

begun between Mr. Stettinius and the chief of the air service, Ameri- 
can Expeditionary Forces, representing America, and M. Tardieu 
and the French air ministry, representing France, looking to an 
equitable adjustment of the respective- rights and liabilities of the 
parties arising under this contract and its cancellation. Each 
party instituted separate far-reaching and intensive studies of the 
conditions of manufacture of these materials, factory by factory, 
in order to ascertain the actual loss to France in cancelling these 
contracts. * 

A survey made by an American Air Service committee, con- 
sisting of 17 officers and 2 civilians, was completed by the latter 
part of December, 1918, This survey showed (1) the number of 
cellules (airplanes without motors) of various tj^pes allocated to the 
American Expeditionary Forces; and (2) the number of cellules 
actually in process of construction, together with their percentage 
of completion. With these data in hand, the percentage of com- 
pletion of cellules under construction was reduced to an equivalent 
of completed cellules, and their purchase price under the contract 
computed. These computations were made with a view to proposing 
to the French that America might satisfy her obligations in respect 
to this contract and its cancellation, by taking and paying for com- 
pleted cellules in place of taking and paying for a large quantity 
of materials in process, of which the estimated salvage value was 
only about 5 per cent of the cost of production. 

There were w^ide discrepancies between the estimates made by the 
American and French services respectively, and it was only after 
long and painstaking conferences and diligent study that these differ- 
ences were finally reconciled and adjusted. The problems presented 
by this settlement were among the first taken up by the Commission 
after it reached Paris. The negotiations and work were carried on 
under the supervision, and with the approval of the Commission, by 
Maj. Gen. Patrick, Chief of the American Air Service, and the mem- 
bers of his staff, and an agreement with the French was reached in 
May, providing for the following payments by America : 

Francs. 

For 3,568 cellules in process 56,295,662 

For 3,979 motors in process 64, 563, 788 

For " cancellation costs " °^ 14, 710, 537 

For spare parts in process ^° 19,962,553 

For cancellation of spares 8, 225, 004 

For miscellaneous materials in process 3, 496, 628 

For cancellation of miscellaneous materials 413,589 

167, 667, 761 

=* The " cancellation costs " were for raw materials, commitments, and labor, less 
salvage value, in connection with articles ordered but not yet in process of construction. 

* The " spares " and miscellaneous articles represented aviation accessories in process 
of manufacture, calculated on the same basis as that of cellules and motors. 



UNITED STATES LIQUIDATIOlSr COMMISSIOlSr. 65 

This settlement contemplated that aeronautical material of the 
value of 144,318,631 francs was to be delivered to the United States 
and paid for by it; while the United States was to psij 23,349,130 
francs " cancellation costs." France released the United States from 
any further obligations under the contract of May 3, 1918, and sub- 
sequent orders placed pursuant to its terms. The underlying prin- 
ciple of the settlement was to find the actual cost to France of mak- 
ing the cancellations, and then, instead of the United States accept- 
ing salvage value only — estimated at 5 per cent — on left-over mate- 
rials, it should as far as possible take deliveries of these materials 
in t&rms of finished products. From what follows, it will be seen 
that the agreement concerning deliveries under this settlement was 
considerably modified in connection with the settlement of our '' Lib- 
erty motor" claim. 

LIBERTY MOTOR SETTLEMENT. 

About the middle of May, the Commission, Mr. Cuthell, Gen. 
Patrick, and members of his staff presented to the French air minis- 
try America's claim against France growing out of the production 
of Liberty motors in the United States. After several conferences 
with the French authorities, it was agreed that the same principles 
which governed in the settlement of the claim of France against 
America for the cancellation of the aircraft contract of May 3, 1918, 
should apply to the settlement of the Liberty motor claim. By this 
method it was established that France owed the United States the 
sum of $21,272,250, of which $19,530,000 represented the cost of 
Liberty motors and spare parts which France was entitled to receive 
from America, and the remainder represented cancellation indem- 
nities. 

The Iwo settlements of large and complicated transactions, by the 
application in each case of the same general principles, left America, 
on the one hand, obligated to deliver to France a large number of 
Liberty motors, spare parts, and materials, much of which was in the 
United States, and for which Fraaice had no particular use ; and, on 
the other hand, left France obligated to deliver to the United States 
a large number of airplanes and airplane materials which were lo- 
cated in France, and for which America had no particular use. 
France did want 500 Liberty motors, and America did want a small 
part of the quantity due her of airplanes and materials. The French 
took delivery of the 500 Liberty motors, and America took delivery 
of a number of airplanes and spare parts of the types which she 
could use to the best advantage, leaving with France airplanes and 
spare parts which America was entitled to receive of a cost value 
sufficient to balance the cost value of the Liberty motors which 
183176—20 5 



66 UNITED STATES LIQUIDATION COMMISSION'. 

France was entitled to receiA e but did not take from America, At 
this point, the mutual obligations to deliver were canceled.^^ In 
this way both parties were relieved from taking delivery of equip- 
ment and material which they did not- need, and the enormous ex- 
pense of handling and transportation, both by land and sea, was 
saved. 

The Liberty motors and spare parts belonging to the United 
States in France were used in filling our obligations to make deliv- 
eries to England, in accordance with our Liberty motor settlement 
with her:^* and a limited number of them were sold to Poland. 

TKENCH TRANSrOKTATION SETTLEMENT. 

When the American Expeditionary Forces arrived in France they 
found that all transportation for the French Arm}^ was being for- 
warded on " Ordres de Transport " signed by French Army officers, 
and that British troops and materials were going forward on like 
orders signed by British officers. An agreement was promptly per- 
fected with the French Government providing for the transporta- 
tion of American personnel and supplies over French railroads under 
the same arrangements, the orders being signed by American offi- 
cers. When the Commission took up its work it found that, although 
the matter had been the subject of careful consideration and numer- 
ous conferences, not one cent had ever been paid France or the French 
railroads on account or otherwise, no rate had ever been fixed, nor 
had any formula or agreement been reached as a basis for payment 
by America for the extensive services rendered her by the railroads 
of France. 

During the war the American Expeditionary Forces brought to 
France and put in operation on the French railroads approximately 
1,100 locomotives and 17,000 cars. In addition it established large 
depots, regulating stations, and repair shops, together with about 
tiOO private sidings to connect our installations with the main lines. 
Our Army furnished to the French railroads engine crews, train 
crews, repair shops, and personnel, together with all kinds of rail- 
way materials and supplies. All of these services were rendered, 
and all of this equipment was furnished, without any particular 
agreement for compensation, although there was always of course 
the general understanding on both sides that everything was to be 
for " cost ". to the supplying nation. 

The reason for the absence of specific agreements on this, as on 
several other important matters, is to be found in the enthusiasm and 

*^ See Appendix XXVIII for a copy of the contract between the United States, acting 
through the Liquidation Commission, and France, acting through the Minister Aero- 
nautique, dated Nov. 8, 1919, with exhibit attached. 

3^ See p. 52, this report. 



UNITED STATES LIQUIDATION COMMISSION. 67 

energy with which eAerybody's attention during; the war was very 
properly concentrated on the problem of driving forward the mili- 
tary program. The accounting and final reckoning always received 
secondary attention. ^Vhen the Commission took up this problem, 
in March. 1919, it found both the American and French transporta- 
tion records extremely difficult to handle because so little had been 
done to make cumidati^e summaries from time to time and because 
some of the records were incomplete. It was only after a series of 
conferences participated in by the commissioners and members of 
their staff and extending through many days and weeks, in which 
every avenue of information was explored with painstaking care and 
various facts and theories of the case were developed, that the Com- 
mission was able to formulate and propose a basis for settlement. 

In 1898 the French Government entered into an agreement called 
the Traite Cotelle with the six principal railroad companies of 
France. This covenant provided for the rates and conditions of 
military transportation in time of war and it was to continue in force 
for a period of 10 years, subject to renewal at the option of the 
government. The rates fixed by it were intended to reimburse the 
railroads without profit for the services to be rendered, and the 
estimates upon Avhich they had been calculated were based on the 
low commercial rates existing in 1898. The theory at that time was 
that the impending war would be of short duration and that the rail- 
roads would be able to handle the large volume of traffic involved in 
mobilization and demobilization of the Army at very low figures. 

This expectation was not realized. The volume of traffic sur- 
passed all estimates and the cost of operation steadily advanced. As 
the war went on and the condition of the French railroads became 
w^orse and Avorse. the demand from the railroads became A^ery in- 
sistent that the rates provided for in the Traite Cotelle should be 
substantially increased. It was not, how^ever, until the spring of 
1919 that a new agreement was concluded between the French Gov- 
ernment and her railroads. The increases provided for in this new 
agreement are not excessive. In fact, some of the experienced rail- 
road men connected with the American Expeditionary Forces' trans- 
portation service with whom the Commission consulted, have advised 
that justice to the French railroads recjuired still greater increases. 

The charges for the railway transportation of our troops and 
supplies in France were, of course, ultimately due to the individual 
French railroad companies, the railroads being privately owned. 
But, when our troops entered France, the French Government had 
assured us that we should have the use of all of the transportation 
facilities in France on the same terms which their Government en- 
joyed and all of our original dealings were directly with that 
government. Moreover, the French Government owed its railroads 



68 UNITED STATES LIQUIDATION COMMISSION. 

a much largei- sum than we owed them and they were anxious that 
we should not make independent settlements with the individual 
lines and thus establish precedents which might embarrass them in 
their own dealings with the railroad 'companies of their country. 
From America's viewpoint it was clearly to our advantage to deal 
with the French (jovernment instead of directly with the railroads 
inasmuch as the statements of account and settlements with the fi 
trunk lines and 79 secondary lines would have required a very large 
corps of accountants and an enormous overhead expense, whereas 
by dealing with the government directly we were able to make one 
final settlement and leave behind no claims to arise and annoy us 
in the future. 

In discussing the settlement, the Commission insisted upon a 
fundamental principle which was finally accepted by the French 
(xovernment, viz, that America would pay for transportation of her 
personnel and freight at the same rates at Avhich the French Army 
paid, provided that the rate fixed shoidd not yield, out of the share 
coming from military transportation, a higher operating revenue 
than the average operating revenue for the three years prior to 1914. 
This principal was an important factor influencing the French Gov- 
ernment and the French railroads in their revision of the Trnite 
Cotelle. The ncAv military rates were designed to wholly reimburse, 
without profit, the French railroads for the cost of the services which 
they had performed, including in that cost such share of a fair rate 
on invested capital as could be justly assigned to the military services 
rendered, but not including enough to make up the deficit which had 
resulted from inadequate commercial rates during the war. 

Numerous troublesome questions arose in connection with the 
application of the general principle ; for example, the question of the 
rental rates to be paid by French railways for the larger and more 
expensive American engines, the proper rentals for American freight 
cars, which were double the size of the French ones, the proper freight 
rate by carload lots in the larger cars, etc. It was found that, in 
addition to the claims against us for transportation of personnel and 
freight over French main line roads, there were a large number of 
claims for transportation over 79 secondary lines, claims for main- 
tenance of about 800 private sidetracks and connections built to reach 
American installations, claims for switching and denmrrage, for 
rental of French locomotives leased to America for yard service, for 
rental of buildings and other facilities, for French employees en- 
gaged in private service in American yards, for supplies including 
coal, oil, waste, heat, light and power, for the upkeep of American 
rolling stock by the French, for damage to certain equipment and 
materials by America, for construction expenses including a large 
claim for construction work on the secondary railways used for 



UNITED STATES LIQUIDATION COMMISSION. 69 

American forestry operations, and for various other services and 
supplies. 

As a partial set-off to these claims America had a long list of mis- 
cellaneous claims against the French railroads and the French Gov- 
ernment. They were for rental of locomotives and cars, for services 
of train crews, for the repair of French cars and locomotives, for 
coal, oil, waste, and other supplies furnished to the French railroads 
for their engines, for loss and damage, theft or appropriation of 
American freight, for unloading and handling at ports materials for 
the French Government, for reconstruction work on French railways,, 
in the zone of the advance east of Verdun, for rent of Belgian loco- 
motives leased by America from Belgium and re-leased to French 
railways, for erection by America of locomotives and cars for French 
railroad companies and for the French Government, and for various 
other services and supplies. 

For the purpose of handling this problem and reaching a settle- 
ment the Commission created a special section headed by Col. F. A. 
Delano, I deputy director general of transportation of the American 
Expeclitionary Forces and formerly president of the Wabash Rail- 
road and a member of the Federal Reserve Board. This section 
undertook to reduce these claims and counterclaims to concrete form 
and to state an account between the United States, on the one part, 
and the French Government and the French railroads, on the other 
part. Finally, |after several months' work on the part of Col. Delano 
and his staff, an account was stated covering all transportation mat- 
ters arising betAveen April 6, 1917, and October 1, 1919, which 
showed : 

Due by United States to France: Francs. 

For transportation of all freight and troops 430,000,000.00 

For miscellaneous charges - — 71, 107, 336. 53 

501, 107, 336. 53 
Due by France to United States : 

For miscellaneous charges 66,121,946.80 

Net balance due by United States to France 434,985,389.73 

It was with some difficulty that the French Government was per- 
suaded that the settlement should cover not onlj^ the particular items 
which had been the subject of controversy but also any and all 
claims which might be presented in the future in connection with 
the American use of French railroads during this period, and that 
it should cover the use of French railroads by naval forces and Army 
auxiliary services, such as the Red Cross, Young Men's Christian 
Association, Knights of Columbus, Salvation Army, and Jewish 
Welfare Society. The contract as eventually signed finally disposed 
of every claim or demand of every nature arising between the two 



70 UNITED STATES LIQUIDATION COMMISSIOlsr. 

parties which was definitely connected with raih-oad transportations, 
inchidinir claims for loss or dama<)^e to f reioht and damage to railroad 
property. In other words, the railroad transportation settlement, 
dated October 1, 1919,^- is a full, final, and complete settlement be- 
tween the United States on the one part, and the Republic of France 
and the French railroads on the other part, for all claims of any 
nature arising in connection with transportation by rail in France 
prior to October 1, 1919, and France agrees to indemnify and save 
America harmless against any such claims on the part of French 
railroad companies. ^ 

The contract further provides that — 

On and after October 1, 1919, and until December 31, 1919, France will 
furnish or cause the French railroads to furnish transportation over the 
French railroads for the personnel, animals and freight of said forces at the 
same rates at which, and on the same terms and conditions tinder which, the 
said railroads shall, during the same period, furnish transportation for the 
personnel, animals and freight of the French Army. 

The payment to France of 434,985,389.73 francs settled all bills 
for carrying and recarrying 2,000,000 men over the longest lines of 
communication of any of the armies operating in France, including 
their travel on leave. It settled the bills for carrying the American 
Army of Occupation over French railroads to and from Germany, 
and it settled the bills for transporting and handling over 15,000,000 
tons of freight. This figure averages onlj^ slightly in excess of 200 
francs for each man to cover all his travel by rail during his entire 
stay in France; while the cost per ton per mile for handling the 
freight is only about one-half of the corresponding cost per ton per 
mile for the ocean transportation of the same materials. 

FRENCH PORT DUES SETTLEMENT. 

The port facilities of France are built by funds appropriated from 
the national treasury. The chambers of commerce of the ports, how- 
ever, assume responsibility for re-paying the treasury its investments, 
and for administering and maintaining the facilities. Funds for this 
purpose are raised by means of a charge on each vessel which enters, 
known as "port dues" {Taxes de Peage). 

Early in the war, national vessels of France and her Allies were 
exempt from the tax, but on November 17, 1917, the exemption was 
cancelled, and all vessels, French national and allied national, as well 
as privately owned vessels, were charged the regular port dues. The 
United States never made any current payments of these dues. Be- 
fore the Commission went to Europe, however, the question of our 
payment had been taken up by the French ambassador at Washington 

»» See Appendix XXIX for copy of railroad transportation contract, dated Oct. 1, 1919, 
between France and United States. 



UNITED STATES LIQUIDATION COMMISSION. 71 

who had secured a general promise from our Government that they 
should be paid. The American Expeditionary Forces had tried to 
arrive at a temporary settlement, first with each port, then w^ith the 
French Government, but no settlement had been reached. 

The different chambers of commerce had been presenting- claims 
for port dues to the American Expeditionary Forces without any 
uniformity in the basis of calculating rates; some were very high, 
and some were very low. We had dealt with the French Government 
alone, and not with the port authorities, in arranging for our entries 
into French ports; so, when the Commission took up the case, it 
pressed the French Government to make a general settlement for 
port dues and take over the responsibilities of the United States to 
the separate chambers of commerce. Several methods of calculating 
a lump-sum payment were suggested. The first was to have the total 
expenses chargeable to the port-dues fund calculated for each port 
for the period during which the port had been used by American 
vessels, the United States paying a portion of that sum equal to the 
ratio of her shipping to all other shipping at the port. This plan 
was rejected by the French authorities. 

The French proposed that we pay commercial rates, minus certain 
exemptions for vessels carrying military personnel and munitions. 
The total charges calculated on this basis would have been approxi- 
mately 4,825.000 francs. This plan was rejected by us. 

The water level had been raised at St. Nazaire. practically for our 
sole benefit, and at French expense. On the other hand, we had put 
in docking facilities at numerous ports which had been used by the 
French Snd others as well as by our vessels. After a series of nego- 
tiations, the French agreed to allow a reduction of 50 per cent from 
commercial rates at Bordeaux and 40 per cent at all other ports. The 
fees were calculated on this basis, and finally the French agreed to 
accept a lump-sum payment of 3,000,000 francs to cover dues for 
the entries of all vessels of the United States or vessels serving the 
United States between April 6, 1917, and the complete evacuation of 
France by American forces. The contract was signed October 1, 
1919.« 

It covered (a) port dues or tonnage dues, which are entry charges 
based on tonnage of ships, tonnage of cargoes, and the number of 
passengers landed; (h) the raising of water level; and (c) dredging 
operations. There were excepted from the terms of the contract 
such special charges as (a) pilot's fees; (7j) fees for the use of cranes, 
hangars, lighters, warehouses, railroad trackage, etc.; (c) bills for 
coal, water, light, and other supplies; (d) repairs; {e) trimming 
charges; and (/) port sanitary inspection and hospital fees. 

*" See Appendix XXX for copy of contract dated Oct. 1, 1919, and evidencing the 
general settlement of port dues with France. 



72 UNITED STATES LIQUIDATION COMMISSION. 

We used 15 ports in France. At the 6 principal ones, the per- 
centage of our commerce to that of the total entering after April 6, 
1917, was as follows: At St. Nazaire, GO per cent; at Bordeaux, 27 
per cent ; at Nantes, 33 per cent ; at La Rochelle, 46 per cent ; at Brest, 
53 per cent; at Marseille, 19 per cent. No current payments had 
been made. 

GENERAL SETTLEMENT WITH THE FRENCH GOVERNMENT. 

When the Commission arrived in Paris, it found that the Ameri- 
can Expeditionary Forces were paying in francs all bills rendered 
against them by the several departments of the French Government 
for supplies, equipment and material and for services, while France 
was settling like bills rendered by the American Expeditionary 
Forces and the War Department of the United States through credits 
extended by the Treasury Department of the United States. On 
April 15, 1919, this practice was discontinued by direction of the 
Commission, and an agreement M^as reached with the French Gov- 
ernment, in terms of which invoices should be rendered by each 
government against the other coveriAg all bills, accounts, claims, 
and demands of every nature whatsoever growing out of or con- 
nected with the war, and these invoices should be checked, audited, 
corrected, or approved, but held in abeyance unpaid until such time 
as a final statement of account between the two Governments could 
be prepared ; and the obligations of one Government were then to be 
set off against the obligations of the other. 

It was later agreed that this general settlement should embrace all 
transactions arising between the 6th of April, 1917, and the 20th of 
August, 1919, between the War Department of the United States and 
the American Expeditionary Forces, on the one part, and the Re- 
public of France, on the other part, and that all bills, accounts or 
claims not presented on or before September 6, 1919, should be for- 
ever barred. Pursuant to this arrangement, all possible pressure 
was brought to bear by the Commission through the several services 
of the Army and otherwise to have prepared and presented, liefore 
September 6, proper bills, accounts and invoices for all amounts due 
from France to us, and the results were gratifying. 

Immediately following September 6, a series of conferences were 
held between representatives of the several services of the Ameri- 
can Army and representatives of the corresponding services of 
the French Army, which were attended and directed by H. T. 
Klein for the Commission. It was the purpose of these conferences 
to adjust and reconcile all items of the long account. The differences 
which could not be adjusted in this way were taken up by the Com- 
mission directly with M. Edouard Boulanger, Controleur de I'Ad- 



UNITED STATES LIQUIDATION COMMISSION. 73 

ministration de TArmee, who was designated by the French Govern- 
ment to act in this capacity. After numerous prolonged conferences, 
satisfactory adjustments were reached, an account was stated, and 
two contracts were drawn, evidencing a final and complete settle- 
ment.*^ 

In the contract of general settlement, dated November 25, 1919, 
evidencing full, final, and complete settlement of all accounts, initi- 
ated, arising, or accruing between the 6th day of April, 1917, and 
the 20th day of August, 1919, in respect of transactions between the 
War Department of the United States and the American Expedi- 
tionary Forces on the one part and the Eepublic of France on the 
other part, with four enumerated exceptions, the releasing clause 
reads as follows : 

The Republic of France does hereby fully, completely, and in all things re- 
lease and discharge the United States of America, and the United States of 
America does hereby fully, completely, and in all things release and discharge 
the Republic of Frarice, in respect of the transactions aforesaid, from all bills, 
accounts, claims, obligations, demands, rights, causes of action, suits, and con- 
troversies, of every nature whatsoever, which either party now has against the 
other, or which may hereafter arise, whether by reason of or in anywise inci- 
dent to or growing out of the delivery or contract for the delivery of materials, 
supplies, or equipment, or for services rendered or contracted to be rendered, 
or for the occupation and use of all public properties of France and all damages 
thereto or otherwise, initiated, arising, or accruing during the said war period 
between the said War Department on the one part and the Republic of France 
on the other part. 

The contract recites that the total of all franc credits due by each 
party to the other shows a net balance in favor of France of 1,488,- 
619,027.52 francs, which America agrees to pay to France ; and the 
total of all dollar credits due by each party to the other shows a net 
balance in favor of America of $177,149,866.86, which France agrees 
to pay to America. The question of the form of payment and the rate 
of exchange is noM^ being negotiated between the French representa- 
tives in the United States, on the one part, and the representatives of 
the United States War and Treasury Departments, on the other part. 

The contract further provides as follows : 

Article II. Nothing hereinbefore contained shall be held or construed to in 
anywise annul, alter, modify, or affect the obligations of France held by America 

« See Appendix XXXI for (1) copy of the contract dated Nov. 20, 1919, between 
the War Department of the United States and France evidencing the general settlement 
of all mutual accounts, claims, and demands arising in Europe, and (2) a copy of the 
balance sheet used as the basis of the settlement; and Appendix XXXII for (1) the 
contract of general settlement dated Nov. 25, 1919, which concludes all matters outstand- 
ing between the War Department of the United States and France, whether arising in 
Europe or not, with the exception of four matters specifically enumerated, and (2) a 
copy of the balance sheet used as the basis of the settlement. The accountants' records 
relating to the settlement are in the files of the Commission, 



74 UNITED STATES LIQUIDATIOlSr COMMISSION. 

or the obligations of either party liereto arising out of the following special con- 
tracts or agreements, namely : 

{a) The contract between America and France dated August 1, 1919, where- 
by America sold and France purchased certain properties therein referred to, 
France agreeing to pay therefor the sum of four hundred million ($400,000,- 
000) dollars, with interest thereon, at the time and under the terms mentioned 
tlierein ; 

(&) The contract between America and France for the settlement of rail- 
road transportation and other claims, dated October 1, 1919, in which America 
agrees to pay France the sum of four hundred and thirty-four million nine liun- 
dred eighty-five thousand three hundred eighty-nine and 73.100 (frs. 434,- 
985,389.73) francs; 

(c) The contract between America and France for the settlement of all port 
dues and similar claims, dated October 1, 1919, in which America agrees 
to pay France the sum of three million (frs. 3,000,000) francs; 

{d) All contracts, agreements, or arrangements entered into between America 
and France for or in connection with sales made by America to France in the 
United States since November 11, 1918. 

Article III. This contract shall not operate as a release or modification of 
or in anywise affect whatever claim France may now have against America 
growing out of services rendered by France to America during the war period in 
connection with the ocean transportation of American troops. 

The importance, from every point of view, of this comprehensive 
and far-reaching settlement between the two Governments can not 
be too strongly emphasized. Innumerable disputed accounts would 
almost certainly have arisen during succeeding years and they might 
have become a source of bitter controversy. 

Since the consummation of this general settlement France has 
presented certain claims aggregating more than $10,000,000. These 
were carefully considered by the Commission in conference with 
the French representatives, and the conclusion M^as reached by the 
Commission that they should be declined and under no circumstances 
should the general settlement he re-opened. The accounts are now 
clear and the books of both parties are balanced. 

INDEMNIFICATION OF AMERICA BY FRANCE AGAINST ALL CLAIMS OF 
NATIONALS FOR TORTS, WORKMEN'S COMPENSATION, RENTS, REQUISI- 
TIONS, AND DAMAGES. 

The general settlement made with France affords America no pro- 
tection against tort claims of French nationals, claims of nationals 
based on the workmen's compensation act, or claims of nationals for 
rents, requisitions, or other damages. These claims were handled 
in France by the Renting, Requisition, and Claims Service of the 
American Expeditionary Forces. 

When the Commission took up its w^ork it found that the Renting, 
Requisition, and Claims Service had an admirable organization, 
functioning under the direction of Col. Blanton Winship, the staff of 



UNITED STATES LIQUIDATION COMMISSION. 75 

officers being composed largely of men drawn from such civilian 
pursuits as law, architecture, and engineering. The Commission 
deemed it the part of wisdom not to interfere unduly with this 
work, which was being well done; but in a general way, through 
Col. Winship and the members of his staff, to keep in touch with 
the work, and, by means of informal conferences, to define the general 
policies to be carried into effect. 

This ser\dce had been organized in the spring of 1918, pursuant 
to the act of Congress of April 18, 1918, which conferred upon the 
War Department of the United States the right to pay indemnities 
for damages caused by the American forces in Europe to persons 
and property of friendly nationals, providing such claims "should 
be payable according to the law or practice governing the military 
forces of the country in which they occur." 

The activities of this service embraced the work of (1) billeting 
troops and settling claims for damages to billets {degats) ; (2) rent- 
ing lands and buildings, and paying the rentals; (3) requisitioning 
real and personal property; (4) examining and settling all claims for 
personal injuries and damages to property; (5) handling admiralty 
claims arising in European waters; and (6) to a limited extent, 
under the direction of the Commission, investigating and adjust- 
ing claims for personal injuries or loss of life, under the French 
workmen's compensation act, of the laborers employed by the mili- 
tary forces of the United States. 

This service paid out 50,108,091 francs for billeting American 
troops in France, and the accounts show 8 centimes (or, at the rate 
of 10 francs to the dollar, less than 1 cent) per day per man as the 
average cost of billeting our troops. This European method of 
quartering of troops is much cheaper than tenting the men. Under 
the Act of April 18, 1918, the service has investigated and settled 
38,299 claims, in which the total amount claimed was approximately 
15,000,000 francs, paying in complete settlement a total of 8,337,- 
719.07 francs. It has investigated and declined 13,446 claims under 
this same act, where the amount claimed exceeded in all 10,000,000 
francs. In the case of 552 of the claims which were disallowed, a 
liability was admitted by the service, but the claimant refused to 
accept the amount offered in settlement. This service has paid, for 
the use and occupation of real estate, 38,421,780 francs, and for 
damage to real estate, 9,623,309 francs. 

The work of the service was carried on in 72 Departments of 
France, in England, and other places Avhere the American Army 
operated. The number of its personnel has changed considerably 
from time to time, being highest in June, 1919, when the staff con- 
sisted of 663 officers, 37 field clerks, and 1,065 enlisted men, organ- 
ized into 52 companies. 



76 UNITED STATES LIQUIDATION COMMISSION. 

The AYork has been well done, and Awhile the total amount paid has 
been large, no individual case was settled without the careful investi- 
gation of a competent officer. The total overhead expense of main- 
taining the service was estimated at $3,000 a day on September 1. 
1919, and at 25,000 francs per day on December 1. 1919. 

While the Renting, Requisition, and Claims Service made a deter- 
mined drive to dispose finally of all claims within its jurisdiction by 
the time the other matters in France should be liquidated, it was 
found that new claims were being constantly presented, and claims 
W'hich had been declined because of excessive demands, or otherwise, 
w^ere being re-opened. The service had, on December 1, 1919, claims 
against the American Expeditionary Forces for rentals where the 
rate was fixed, amounting to more than 1.500.000 francs, and claims 
for damages to leased property estimated at 4.000.000 francs. It 
had on file unsettled claims for use of and damage to requisitioned 
property estimated at 1,500,000 francs. There were a few unpaid 
billeting claims and claims under the workmen's compensation act 
for over 500,000 francs. Many of the matters which had not yet 
been concluded at this time were those involving peculiarly difficult 
or delicate problems where the parties had been unable to reach an 
amicable and satisfactory adjustment. 

In order to avoid the necessity of maintaining the Renting, Re- 
quisition, and Claims organization in France for an indefinite period 
to investigate and adjust pending claims, as well as dormant ones 
which were constantly being presented, the Commission co-operating 
Avith the commanding general of the American Expeditionary Forces, 
began negotiations with the French Government as early as August^ 
1919, with a view to inducing it to step into America's shoes and 
take over these investigations and settlements. It was urged that, 
since the French Government already had an organization which 
was engaged throughout France in handling claims of this character 
and would continue in that work, there would be a very small addi- 
tional overhead expense connected W'itli their taking up claims in 
behalf of America. It was made clear that it was not our purpose 
merely to save money by foisting upon France an expense which 
should be borne by America; but that, because America would be 
eliminating a large overhead expense, she could afford to make to 
France a full and even liberal payment in order to induce France 
to undertake this work. 

After careful study of the problem and numerous conferences by 
authorized representatives of the French Government appointed for 
that purpose, on the one hand, and by the Commission, the command- 
ing general, American Expeditionary Forces, and the Director of 
the Renting, Requisition, and Claims Service, on the other hand, an 
agreement was reached on December 1, 1919, under the terms of 



UNITED STATES LIQUIDATION^ COMMISSION", 77 

which the French took over all oblio^ations Avhich our Kentino-, Ive- 
quisition, and Claims Service had outstanding on that clate.^'- 
The contract provides, amono; other things : 

France hereby substitutes itself for America in reference to and guarantees 
the latter against all clainvs, demands, obligations, rights, actions, suits, and 
controversies of every nature arising in France during the said war period 
which any inhabitant or any person subject to the sovereignty of France or 
any organization, association, or corporation, coujuiune, or department of 
France may now have or which may hereafter accrue for damage to. use, or 
loss of property, or injury to or death of persons, caused by or resulting from 
acts or omissions of members of the American military forces or any one con- 
nected therewith (not including members of the American welfare organiza- 
tions) during the said war period — that is. between the 6th day of April, 1917, 
and the 31st day of December, 1919. 

America in turn agrees to pay France — 

in cash the sum of twelve million (12.000,000) francs (hereinafter designated 
" minimum payment "). If upon the 31st day of December, 1923, the aggregate 
of all payments made by Fi-ance to claimants on account of the claims assumed 
by it exceed such mininmm payment, then in such event America agrees on 
demand to then pay to France such excess: Provided, hotvever. That such 
additional payment by America shall in no event exceed the sum of six million 
(6.000-,000) fi-ancs. 

It will be noted that the amount paid by France to clahnants 
only is taken into account and no allowance is made for overhead and 
administrative expenses. 

Attention is called here to the status in France of claims arising 
out of " acts of war" (faits de guerre). Neither the Renting, Requi- 
sition, and Claims Service nor the Commission has ever expressed 
any intention of honoring such claims, nor has France or her na- 
tionals ever pressed any claim against America for damages arising 
in this way. But it is worthy of note that France, by an act of April 
IT, 1919, has provided for payments to her own nationals for damages 
resulting from faits de guerre. This was done for the purpose of 
equalizing the burdens of the war's destruction in favor of the in- 
habitants of the devastated regions and is an act of grace on the 
part of the French Government. The first article of the act reads, 
■' The Republic proclaims the equality and the solidarity of all 
French citizens with respect to the charges of war." It is also worthy 
of note that the act of Congress of April 18, 1918, under which the 
Renting, Requisition, and Claims Service has been settling tort and 
similar claims provides that " claims under this statute shall not be 
approved unless they would be payable according to the laiv or prac- 
tice governing the military forces of the country in which they 
occur.'''' 

*2 See Appendix XXXIII for cOpy of the contract between the United States and 
France, evidencing the assumption by France of all claims of French nationals against 
America for torts, employer's liability, rents, and requisitions. 



78 UNITED STATES LIQUIDATION COMMISSION. 

Attention is also invited to the fact that the treaty of peace be- 
tween the Allied and Associated PoAvers. on the one partv and Ger- 
many, on the other part, signed at Versailles. June 2S, 1010, reads in 
part (art. 23-2) as follows: 

The Allied and Associated Govenimeiits feco.unize that the resources of Ger- 
many are not adequate, after taking into account permanent diminutions of 
such resources which will result from other provisions of the present treaty, 
to make complete restoration for all such losses and damages. 

Part VIII, Annex I, paragraph 0, of the treaty provides in sub- 
stance that Germany shall assume liability for damage in respect of 
all property wherever situated belonging to any of the Allied or 
Associated States or their nationals, which has been carried off. 
seized, injured, or destroyed hy the acts of Germany or her allies on 
land, on sea, or from the air. 

Much of the destruction in the devastated regions of northern 
France is, of course, due to acts of war on the part of the armies of 
France and her allies, as well as to acts on the part of the armies 
of Germany and her allies. As above noted, P\-ance has, by the act of 
April IT, 1919, assumed, as between it and its nationals, the burden of 
making reparation because of such destruction without respect to the 
army responsible for it. 

It is conceivable that at some future time a French administration 
may feel justified in calling upon America for contribution in dis- 
charging so much of this burden as may not be covered by German 
reparation payments, in the ratio which the destruction wrought by 
the American Army bears to the whole destruction. Attention is 
invited to the fact that the releasing clause of the contract of De^ 
cember 1, 1919, is clearly broad enough to estop France from ever 
presenting and pressing such a clajim. 

SUMMARY. 

1. The total sales of the War Department property in Europe 
made by this Commission aggregate $822,923,225.82. Of this, 
$400,000,000 is evidenced by French interest -bearing bonds now on 
deposit with the United States Treasurer, representing the considera- 
tion for the bulk sale in accordance with the contract of August 1, 
1919, under which all of the United States War Department prop- 
erty in France then remaining unsold was disposed of. 

2. The settlement with France by which America's claims against 
French railroads were set off against all transportation claims of 
every nature of France and French railroads against America left 
a net balance due France by America of 434,985,389.73 francs. 

3. All claims of France and her several chambers of commerce 
for work done at ports for our benefit and for port dues were as- 
sumed by France, on America's agreeing to pay 3,000,000 francs. 



UNITED STATES LIQUIDATION COMMISSION". 79 

4, All claims of any person, organization, association, corporation, 
commune, or department of France against America for damage to, 
use, or loss of property or injury to or death of persons have been 
assumed b}^ France, upon the agreement by America to pay France 
the sum of 12,000,000 francs. 

5. The general settlement with France of November 25, 1919, 
finall}^ and for all time settled all claims and controversies not above 
or therein enumerated betAveen France and the War Department of 
the United States, France by the terms of said contract acknowledg- 
ing an indebtedness to America (in addition to the $400,000,000, 
above mentioned) of $177,149,866.86, and America acknowledging an 
indebtedness to France of 1,488,619,027.52 francs in addition to the 
items mentioned in the foregoing paragraphs, numbered 2, 3, and 4. 

By reason of these several transactions, America has avoided in- 
curring the enormous overhead expense incident to maintaining large 
organizations in France for an indefinite period, and has been en- 
abled speedily to withdraw from France all of the representatives of 
the War Department and of the Army, leaving behind a clear record 
and carrying with her the confidence and good will of France and 
of her people. 

BELGIAN SETTLEMENT. 

Copy of the general settlement agreement entered into with Bel- 
gium on November 7, 1919, will be found in Appendix XV ; reference 
to this settlement will be found on page 33 of this report. 

ITALIAN SETTLEMENT. 

On August 13, 1919, John H. Ray, representing Chester W. 
Cuthell, as special representative of the Secretary of War, entered 
into an agreement with Federico Brofferio, representative of the 
inter-ministerial committee of the Italian Government for the read- 
justment of the industries of war, wherein Italy agreed to pay to 
America the sum of $5,200,000, for picric acid (not delivered), 
spruce, fir, and nitrocellulose powder, and America waived claims for 
trinitrotoluol and cotton linters.*^ 

In December, 1919, Harry T. Klein (formerly lieutenant colonel, 
judge advocate) was sent to Italy as the Commission's repre- 
sentative to negotiate a general settlement of all accounts and claims 
with Ital}^ arising in Europe. Gen. Albricci, the minister of war, 
appointed Maj. Gen. Angelo Modena as the Italian representative to 
consummate this general settlement. After repeated conferences be- 
tween the Commission's representative and Gen. Modena and the 



*» See Appeildix XXXIV for copy of contract dated Aug. 13, 1919, between Italy and 
the United States War Department. 



80 UNITED STATES LIQUIDATIOiSr COMMISSION. 

representatives of the Italian treasury department, aviation corps, 
minister of transportation, and the ordnance department, an agree- 
ment was finally reached in February, 1920, that the net balance due 
and unpaid in favor of Italy, amounted to the sum of 29,106,546.75 
lire. Copies of the proposed contract were furnished by Gen. 
Modena to the ministers interested, and Gen. Modena executed this 
contract on February'- 18, 1920, under authority conferred upon him 
at a meeting of the council of ministers.** 

This contract contains not only a complete release of all claims of 
the Italian Government against the United States War Depart- 
ment, arising in France, Italy, and regions adjoining Italy, between 
April 6, 1917, and December 31, 1919, but is also a complete settle- 
ment and release of the claims of all Italian nationals for injury to 
})ersons or damage to property caused by the acts of the military 
forces of America, between the dates mentioned and occurring any- 
where in France, Italy, and regions adjoining Italy. 

The larger part of the net balance due Italy was composed of the 
aviation account, which consisted of items for aviation material fur- 
nished by Italy and services rendered in the training of American 
aviators. This account was carefully investigated by a board of 
aviation officers and recommended by them and by Gen. Patrick, 
in charge of aviation in France. 

Another large item of the account as finally allowed was for 
ordnance material aggregating approximately 6,000,000 lire. Four 
requisitions had been placed Avith Italy for ordnance material, 
artillery ammunition, etc., Austrian and Italian, to be sent to the 
United States for experimental purposes. After this material was 
concentrated by Italy for delivery, the prices quoted were found to 
be unusually high and attempts were made by our ordnance de- 
partment, through militar}' channels, to secure a reduction in prices 
or a cancellation of the requisitions in question. Avithout success. The 
Commission's representative, after several conferences with Gen. 
Modena and Gen. Cortesa, chief of the Italian ordnance department, 
succeeded in securing a cancellation of two of these ordnance requi- 
sitions without payment of any indemnity, and secured a reduction 
of 60 per cent on Austrian material actually delivered and 20 per 
cent on Italian material actually delivered under the tAvo remaining 
requisitions; resulting in a saving of approximatelj^ 6,000,000 lire 
to the United States on the price of the material accepted, at the 
then existing rate of exchange. No indemnity whatever was paid 
for material not accepted. 

Another large item of the account Avas for subsistence stores and 
material furnished the American troops by Italy, which under an 

" See Appendix XXXV for copy of contract of general settlement dated Feb. 18, 
1920, between the United States War Department and the Kingdom of Italy. 



UNITED STATES LIQUIDATIOlSr COMMISSION. 81 

agreement of the chief of the American Military Mission in Italy 
made in 1918, were to be returned in kind. Italy had repeatedly re- 
fused to accept a cash settlement of this account. However, after 
several consultations with Gen. Modena and his advisers, he finally 
agreed to accept a cash settlement of this subsistence account on sub- 
stantially the price basis of what it would cost the United States 
to lay these articles down in Italy. This account approximated 
5,000,000 lire. 

The balance of the Italian account consisted of items for miscel- 
laneous material supplied to our troops, railroad transportation for 
troops, and supplies, and the sum paid Italy for indemnifying 
America against the claims of Italian nationals. There were a small 
number of R. R. & C. claims remaining undisposed of, and a number 
of cases which we were unable to settle directly with the claimants on 
account of disagreement as to liability or the amount which should 
be paid. Italy assumed all these outstanding claims for 180,000 lire 
(less than $15,000, at current rate of exchange when the contract was 
signed), which is regarded as an extremely satisfactory settlement 
in the interest of the United States War Department. 

The American claims against Italy, amounting to 4,669,974.71 lire, 
were allowed in their entirety by Italy. 

The only Italian item arising in Europe left unsettled by this con- 
tract is the American claim against Italy for copper ingots, shipped 
to Italy for the electrification of the Modane Railroad, amounting 
approximately to $207,975. This claim was held in abeyance pending 
a decision of the Inter-allied Reparations Commission, to whom it 
was referred on the suggestion of Gen. Bliss for decision, on the 
question of the distribution of the expenses for such electrification 
and what countries should pay for such improvement. 

LUXEMBOURG CLAIMS. 

Incidental to the advance and withdrawal of our Army of Occu- 
pation, a large number of claims arose in the Grand Duchy of Lux- 
embourg. Many of these were presented by nationals and were dis- 
posed of by the Renting. Requisition, and Claims Service. Others, 
presented by the Luxembourg government, cover the use, occupation, 
and damage to buildings, highways, and other public property. 
The railroads of Luxembourg presented claims covering services ren- 
dered in the transportation of our troops. All of these claims (not 
disposed of by the Renting, Requisition, and Claims Service) aggre- 
gate approximately 3,000,000 francs. 

Certain German war material taken by our Army of Occupation 
in Luxembourg, in the course of its advance, has already been dis- 
183176—20 6 



82 UNITED STATES LIQUIDATION COMMISSION. 

posed of. This Commission has asserted, in behalf of the Imited 
States, ownership of German-built railroad tracks located in Luxem- 
bourg and reduced to possession by our Army of Occupation in the 
course of its advance. This Commissit)n has proposed to the Luxem- 
bourg authorities that the United States will sell and deliver to it 
all of its interest in these railroad tracks, in full satisfaction of all 
claims which the Grand Duchy of Luxembourg may have against 
the United States, of every nature whatsoever, and the undertaking 
on the part of the Gr9,nd Duchy to indemnify and save harmless the 
United States against all claims ^^hich the railroads and nationals of 
Luxembourg may have against the United States. It is believed 
that the settlement will be reached on the basis proposed. 

CONCLUSION. 

Some conception of the Commission's task can be formed from {a) 
the statement of amounts involved in the settlements negotiated and 
actually consummated by and under the direction of the Commission 
of mutual accounts and claims between the United States War De- 
partment, on the one part, and the Allied Governments and their 
nationals, on the other part (which settlements were, where possible, 
consummated through set-offs without cash payments), and (b) the 
amount of sales of property made by the Commission, as follows : 

Amounts involved in settlements : ^^ 

Settlements with France $748,392,004.82 

Settlements with Great Britain 112, 996. 912. 16 

Settlements with Belgium 2.279,827.12 

Settlements with Italy 12, 620, 173. 75 

Settlements with individuals, associations, 

an<l others 17.427,175.41 

Total amount involved in settlements __ 893. 716. 093. 26 
A.m<)unts of sales : ■"* 

Bulk sale to France $400,000,000.00 

Other sales, stated in dollars 377,905,193.23 

Other sales, stated in francs and converted __ 45, 018, 032. 59 

Total amount of all .sales 822, 923, 225. 82 

The Commission w^as created February 11. 1919. The two remain- 
ing commissioners are tendering their resignations on this the 31st 
day of May, 1920. The total expenses incurred and disbursements 

*^ These figures are approximate but are understated, inasmuch as many claims with- 
drawn, I'educed, or disallowed are not included. 

*« All conversions into dollars, for the purpose of this statement, have been made at 
the normal rate of exchange. 



UNITED STATES LIQUIDATION COMMISSION. 83 

made by the Commission aggregate $222,883.17/' These expendi- 
tures are a trifle less than thirteen one-hundred-thousandths 
(0.()()()13) of the amounts involved in settlements made and sales 
negotiated by the Commission. 

Respectfully submitted, 

Edwin B. Parker, 
Ghainnmi^ United States LlquidoMon C om/niission — 

War Department. 
Washington, D. C, May 31^ 1920. 

*' See Appendix XXXVI for statement of expenses and disbursements of tlie United 
States Liquidation Commission — War Department from date of organization, February 
11, 1919, to May 31, 1920, inclusive. 



APPENDIX 

TO THE 

REPORT OF THE UNITED STATES 

LIQUIDATION COMMISSION 

WAR DEPARTMENT 



EDWIN B. PARKER. Chairmaij 



85 



CONTENTS. 

Page. 

I. Acts of Congress approved May 10, 1918, and July '.), 1918 89 

II. Section ,3 of Act of Congress approved March 2, 1919 90 

III. General Orders, No. 24, War Department, February 11, 1919__- 90 

IV. Genei-al Orders, No. 40, War Department, March 19, 1919 92 

V. General Orders. No. 18, headquarters S. O. S., A. E. F., April 

1. 1919 93 

VI. The categories 95 

VII. Categorical summary of inventories of American Expeditionary 

Forces' property 1^0 

VIII. Categorical recai)itnlation of American Expeditionary Forces" 

property in France 101 

IX. Form of receipt given by French 103 

X. Bulk sale contract to France, August 1, 1919 103 

XI. Letter from Mr. Hoover to Judge Parker 111 

XII. Liberated nations and their commercial organizations 113 

XIII. Sales of animals in American Expeditionary Forces 113 

XIV. Sales Charts I, II, and III 114 

XV. Contract with Kingdom of Belgium- 118 

XVI. Sale of motor stocks in (Jermany 122 

XVII. Installations in England 130 

XVIII. British artillery settlement 131 

XIX. Australian wool settlement 130 

XX. Chateauroux tank plant settlement, August 8, 1919 13G 

XXI. Final contract of settlement of Chateauroux tank project, 

October 4. 1919 138 

XXII. Extract from Cuthell-Inverforth agreement of May 10. 1919, in 

re liberty motors 142 

XXITI. Settlement of British interest claim 143 

XXIV. Liquidation of nitrate pool 14-) 

XXV. Dispositi(m of private claims 150 

XXVI. Disposition of French-American artillery imder Stettinins- 

Louclieur arrangement 150 

XXVII. French artillery and ammunition agreement, August 28, 1919-_ 151 

XXVIII. French air-service settlement, November 8, 1919 15ti 

XXIX. French railroad transportation seftlement, October 1, 1919 15 ■ 

XXX. Port dues settlenwut with France, October 1, 1919 16'". 

XXXI. Settlement with France of European accounts. Novembei- 20, 

1919 lti5 

XXXII. General settlement with France, November 25, 1919 172 

XXXIII. Renting. Requisition, and Claims settlement with France, De- 

cember 1, 1919 1T9 

XXXIV. Cuthell-Brofferio agreement with Italy, August 13, 1919 182 

XXXV. General settlement with Italy, February 18, 1920 185 

XXXVI. Statement of expenditures 191 

87 



APPENDIXES. 



APPENDIX I. 

Act of Con(U<es.s, Appkoved May 10, 1918. 

An act authorizing the President during the existing emergency to sell supplies, materials, 
equipment, or other property, heretofore or hereafter purchased, acquired, or manufac- 
tured by the United States, in connection with, or incidental to, the prosecution of 
the war. 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled, That during the existing emergency the 
President be, and he hereby is, authorized, in liis discretion, and upon such 
terms as he shall deem expedient, througli the Itead of any executive depart- 
ment, to sell any supplies, materials, equipment, or other property heretofore 
or hereafter purchased, acquired, or manufactured by the United States in 
connection with, or incidental to, the prosecution of the war, to any person, 
partnership, association, or corporation, or to any foreign State or Government 
engaged in war against any Government with which the United States is at 
war ; and any moneys received by the United States as the proceeds of any such 
sale shall be covered into the Treasury of the United States and a full report 
of the same shall be forthwith submitted to Congress. 

Extract from Act of Congress Approved July 9, 1918. 
Sale of war supplies : That the President be, and he hereby is, authorized, 
through the head of any executive department, to sell, upon such terms as the 
head of such department shall deem expedient, to any person, partnership, asso- 
ciation, corporation, or any other department of the Government, or to any 
foreign State or Government, engaged in war against any Government with 
which the United States is at war, any war supplies, material and equipment, 
and any by-products thereof, and any building, plant, or factory, acquired since 
April sixth, nineteen hundred and seventeen, including the lands upon which 
the plant or factory may be situated, for the production of such war supplies, 
materials, and equipment which, during the present emergency, may have or 
may hereafter be purchased, acquired, or manufactured by the United States : 
Provided further, That sales of guns and ammunition made under the au- 
thority contained in this or any other act shall be limited to sales to other 
departments of the Government and to foreign States or Governments engaged 
in war against any Government with which the United States is at war, and 
to members of the National Rifle Association and of other recognized associa- 
tions organized in the United States for the encouragement of small-arms tar- 
get practice: Provided further. That a detailed report shall be made to Con- 
gress on the first day of each regular session of the sales of any war supplies, 
material, lands, factories, or buildings, and equipment made under the author- 
ity contained in this or any other Act, except sales made to any foreign State 
or Government engaged in war against any Government with which the United 

89 



90 unitp:d states liquidation coMMissiolsr. 

states is at wiw, sliowiiis the character of the .irticles sold, to whom sold, the 
price received therefor, and the purpose for which sold : Provided, That any 
moneys received by the United States as the proceeds of any such sale shall be 
deposited to the credit of that appropriation out of which was paid the cost 
to the Government of the property thus sold, and the same shall immediately 
become available for the purposes named in the original appropriation. 



APPENDIX II. 

Section 3 of the Act of Congress Approved March 2, 1919. 

That the Secretary of War, through such agency as he may designate or 
establish is empowered, upon such terms as he or it may determine to be in the 
interest of the United States, to make equitable and fair adjustments and agree- 
ments, upon the termination or in settlement or readjustment of agreements 
or arrangements entered into with any foreign Government or Governments 
or nationals thereof, prior to November twelfth, nineteen liundred and eighteen, 
for the furnishing to the American Expeditionary Forces or otherwise, for war 
purposes, of supplies, materials, facilities, services or the use of property, or 
for the furnishing of any thereof by the United States to any foreign Govern- 
ment or Governments whether or not such agreements or arrangemeiUs have 
been entered into in accordance with applicable statutory provisions ; and the 
other provisions of this act shall not be applicable to such adjustments. 



APPENDIX III. 

Generai. Orders. | . War Department, 

No. 24. I Washhif/to)}. Fehiuanj 11, lUW. 

united states liqT'Idatton commission — WAR department. 

1. The term " war " as used herein shall be taken to mean the present war 
between the United States of America and the nations associated with it on 
the one part and the Imperial German Government and its allies on the other 
part. The term " United States " as used herein shall be taken to mean the 
United States of America. 

2. In order to facilitate the speedy disposition of all claims of every char- 
acter between the United States on the one part and the nations associated with 
it in the war and their nationals on the other part, growing out of or in any- 
wise connected with the war; and in order to promptly dispose of all property 
or interest in property of whatsoever kind or nature belonging to the United 
States, acquired, constructed or manufactured in connection with or incidental 
to the war and now located beyond its territorial limits ; and in order that the 
interests of the United States and its said a.ssociates shall be mutually sul)- 
served ; by direction of the President there is hereliy created and constituted 
a "United States Liquidation Commission — War Department," as the central 
agency to supervise and direct the disposition of all such claims and property, 
clothed with the broad powers, charged with the duties and constituted as here- 
inafter prescribed, to be exercised in cooperation with the connnander in chief 
of the American Expeditionary Forces. 



UNITED STATES LIQUIDATION COMMISSION. 91 

S. Tlie said CoiiiinissHMi sliall possess the following powers: 
{(i) To (leteriuiiie, adjust, modify, coniproniise, and settle all contracts, obli- 
gations, conuiiitnients. claims, or demands of every nature whatsoever within 
the jurisdiction of the War Department (1 ) between the United States and any 
foreign State or Government or the nationals thereof; or (2) asserted by the 
United States agjiiust any foreign State or (iovernment or the nationals thereof; 
or (3) asserted by any foreign State or (xovernment or the nationals thereof 
against the United States; provided such contracts, obligations, commitments, 
claims, or demands arise out of, are connected with or incident to the participa- 
tion of the Ignited States in the war. 

(b) To sell or otherwise dispose of, upon such terms as it shall determine, any 
property of whatsoever kind or nature acquired, constructed or manufactured 
by the United States in connection with, oi- incidental to, the participation of 
the United States in the war, and now located beyond the territorial limits of 
the United States and its possessions. 

(c) To employ and tix the compensation of such secretaries, counsel, agents, 
factors, and employees as it shall deem necessary for the proper exercise of its 
powers and the performance of its duties. 

(d) To adopt rules and regulations governing its procedure and the conduct 
of its l)usiness. 

(e.) To establish and maintain offices at such place or places as it may deem 
expedient and necessary for tlie proper performance of its duties. 

(/') To exercise all other powers necessary or incidental to the proper per- 
formance of its duties as herein defined. 

4. Payments of money to the United States made pursuant to the Commis- 
sion's action shall be transferred to appropriate officials of the War Department, 
or of the American Expeditionary Forces, by whom the same shall be covered 
into the Treasury or deposited to the credit of appropriations as required by 
law or regulation. 

5. The Connuission shall cause to be kept a full and complete record of all 
its proceedings, a copy of which shall be transmitted to the Secretary of War 
each month, together with such other reports as the Secretary of War may from 
time to time prescribe or as may be prescribed by applicable provisions of 
statutes. 

6. The act of the majority of the members of the Commission, when in session 
as such, shall be deemed to l»e the act of the Commission, or, when not in ses- 
sion, if such action is jissented to in writing by a majority of the members of 
the Con}mission, it shall be deemed to be the act of the Commission. 

7. The powers hereby conferred and the duties hereby prescribed nuiy be 
exercised and performed by the Connuission either directly or through existing 
or hereafter created agencies of the American Expeditionary Forces or of the 
War Department of the United States or through agencies created by the Com- 
mission. All existing agencies performing any of the duties and exercising any 
of the powMi-s herein dealt with shall, unless otherwise directed by the Commis- 
sion, ctintiinie to function as heretofore. While the Commission shall have com- 
plete and exclusive jurisdiction and control over the activities of all such 
agencies with respect to the subject matter hereof, it is not required to function 
directly in relation to such matters, activities, and transactions as in its opinion 
should be dealt with by such agencies. 

8. The American Expeditionary Forces and all other agencies of the War 
Department will furnish the Commission such reports and information as it 
may request, and upon its request furnish it with such officers, personnel, trans- 
portation and other facilities as it may require. 



92 UNITED STATES LIQUIDATION COMMISSION. 

9. The findings and decisions of the Conmiissic.n shall be final and con- 
clusive as to all matters within its jurisdiction. 

10. Until further ordered the Commission shall be composed of tour mem- 
bers, as follows: Edwin li. Parker (chairman), Brig. Gen. Charles G. Dawes, 
H. H. Johnson, Henry F. Mollis. Additions may be made or vacancies filled 
by appointment by tlie Secretary of War. 

By order of the Secretary of War : 

Peyton C. March, 

General, Chief of Staff. 
Oflicial : 

P. C. Harris, 

The Adjutant General. 



APPENDIX IV. 

General Okdeks. | War Department, 

No. 40. j ■ Washington, March 19, 1919. 

operation of UNirED STATES LIQUIDATION COMMISSION AND WAR DEPARTMENT 

CLAIMS BOARD. 

General Order No. 33. War Department, 1919, is rescinded and the following 
substituted therefor : 

(1) The United States Liquidation Commission — War Department constituted 
by General Order No. 24, War Department, 1919, is hereby designated and estab- 
lished as the agency througli whicli shall be exercised the powers conferred 
upon tlie Secretary of War by section 3 of the act entitled "An act to provide 
relief in cases of contracts connected with the prosecution of tlie war, and for 
other purposes,'' approved March 2, 1919, excepting powers with relation to 
agreements and arrangements upon the termination or in settlement of or 
readjustment of agreements or arrangements to be performed in tlie Dominion 
of Canada and entered into with nationals of any Government foreign to the 
United States of America. Section 3 of the act reads as follows : "The Secre- 
tary of W^ar, through such agency as he may designate or establish, is em- 
powered, upon such terms as he or it may determine to be in the interest of the 
United States, to make equitable and fair adjustments and agreements, upon 
the termination or in settlement of or readjustment of agreements, or arrange- 
ments entered into with any foreign Government or Governments or nationals 
thereof, prior to November 12, 1918, for the furnishing to the American Expedi- 
tionary Forces, or otherwise, for war purposes, of supplies, materials, facilities, 
service or the use of property, or for the furnishing of any thereof by the United 
States to any foreign Government or Governments, whether or not such agree- 
ment or arrangement has been entered into in accordance with applicable statu- 
tory provisions ; and the other provisions of this act shall not be applicable to 
such adjustments." 

(2) Tlie Imperial Munitions Board, constituted and appointed by authority 
of the British Ministry of Munitions, acting in conjuncton with two ofiicers 
of the United States Army, who shall be appointed and known as Canadian 
contract assessors, is hereby authorized and empowered to exercise, and is 
designated and established as the agency through which shall be exercised, 
in tlie name of the Secretary of War and by his authority, the powers con- 
ferred upon the Secretary of War by the act of Congress entitled " An act 
to provide relief in cases of contracts connected with the prosecution of the 



UNITED STATES LIQUIDATION COMMISSION. 93 

war, and for other purposes," approved March 2, 1919, in so far as the exercise 
of such powers relates to agreements, express or implied, and arrangements, 
which were entered into through the agency of the Imperial Munitions Board 
and were to be performed within the Dominion of Canada. All agreements, 
adjustments, and awards which shall be made under the authority conferred 
by this section shall be made in writing, signed in the name of said Imperial 
Munitions Board by a member or members thereof designated by said board 
and by one of the aforesaid Canadian contract assessors. 

(3) The War Department Claims Board, constituted by the War Department 
Circular No. 26, dated January 20, 1919, is authorized and directed to exer- 
cise, and is hereby designated and established as the agency through which 
shall be exercised, in the name of the Secretary ,of War and by his authority, 
all powers and duties conferred upon the Secretary of War by the act of 
Congress entitled " An act to provide relief in cases of contracts connected 
with the prosecution of the war, and for other purposes," approved March 2, 
1919, except in so far as the right to exercise the powers conferred under said 
act has been otherwise authorized and delegated under paragraphs 1 and 
2 of this order the said duties and powers may be performed and exercised 
by the War Department Claims Board or by any regular or special member 
or members thereof who may, from time to time, act under the authority and 
direction of the War Department Claims Board. For the expeditious perform- 
ance of its duties, the War Department Claims Board is authorized to make 
such use as it may find desirable, of the Board of Contracts and Adjustments, 
the War Department Board of Appraisers, and any other agency or agencies 
of the War Department. 

(4) Lieut. Col. H. G. Albee, Engineers, and Maj. Sidney R. Underwood, 
Ordnance, are hereby designated and appointed Canadian contract assessors 
and authorized and instructed to exercise, in conjunction with the Imperial 
Munitions Board, the powers and duties provided for in paragraph 2 hereof. 

By order of the Secretary of War : 

Peyton C. Maech, 

General, Chief of Staff. 
Official : 

P. C. Harris, 

The Adjutant General. 



APPENDIX V. 



Genkral Orders, 

No. 18. 



American Expeditionary Forces, 
Headquarters, Services of Supply, 

France, April 1. 1919. 
1. Under the provisions of G. O. 24, W. D., c. s., and G. O. No. 40, c. s., supple- 
mentary thereto, the United States Liquidation Commission — War Depart- 
ment (hereinafter designated " Commission ")— is designated as the central 
agency to supervise and direct the disposition of — 

(a) All claims of every character between the United States on the one 
part and any foreign State or Government and their nationals on the other 
part, growing out of or in anywise connected with the war ; and 

(ft) All surplus property or interest in such property of whatsoever kind 
or nature belonging to the United States, acquired, constructed, or manu- 
factured in connection with, or incidental to, the war and now located beyond 
its territorial limits. 



94 UNITED STATES LIQUIDATION COMMISSION. 

It is not the purpose of the Commission to create an organization to super- 
sede existing agencies of the A. E. F.. which are discharging in whole or in 
part the duties falling within the jurisdiction of the Commission, but rather 
to supervise and direct such activities of existing agencies, and act thro-ugh 
and in cooperation with them. 

2. The following method of procedure has been adopted hy the Connnission 
and the conniianding general. S. O. S., and is published for the guidance of 
all concerned : 

(A) The Connnission will, from time to time, establish and define the policies 
to be pursued in the adjustment of claims and in the disposition of property, 
and acquaint the interested agencies of the S. O. S. therewith. It will negotiate 
directly or through such agencies as it may from time to time designate, with 
ministers or other agencies of other Governments, authorized to treat with 
respect to the settlement of claims or the purchase or sale of property. It 
will, from time to time, instruct the several agencies of the S. O. S. with 
respect to prices, terms of payment, and generally as to the sales and dis- 
position of property. It will prescribe rules to be pursued in the preparation 
and settlement of claims within the jurisdiction, and will, from time to time, 
instruct the several agencies of the S. O. S. with respect to the settlement of 
such claims and the sales of property by them. 

(K) The officers of the various services of the S. O. S. will collect complete 
data with respect to all claims which fall within the jurisdiction of the Com- 
mission and in which such services are concerned and will ( unless expressly 
instructed to the contrary by the Commission) tentatively negotiate a settle- 
ment of such claims, subject to the approval of the Commission; submitting 
such claims, when fully developed, with a recommendation for settlement and 
the reas<»ns therefor, through the finance officer to the Commission, for action. 
Acting under instructions of the Commission, the officers of the various services 
of the S. O. S. will disburse the necessary funds in the payment of claims ap- 
proved by the Commission, under the rules and regulations of the Treasury 
Department and of their respective departments. 

(C) The finance officer, under the direction of the Commission, will co- 
ordinate the activities of the several services in the collection of complete data 
pertaining to claims within the jurisdiction of the Commission, and will 
present the data in such form as may be prescribed by the Connnission, for its 
action. 

(D) The ofiicers of the various services will receive, store, and care for all 
property of the United States. As soon as any such property is, in their opinion, 
available for sale they will so report to the commanding general, S. O. S., 
and, when such report is approved by him, will notify the general sales agent 
of its jivailability for sale, giving him such information with regard thereto 
as he may require. They will furnish necessary information to prospective 
buyers and exhibit to them the property for sale to the end that it may be 
advantageously disposed of. They will, under the directions of the Commis- 
sion and of the general sales agent, negotiate sales, reporting same to the gen- 
eral sales agent. They will prepare for delivery or shipment the property sold 
or otherwise disposed of, and deliver it to the purchaser or to a transporta- 
tion agency in accordance with the terms of the sale. They will, under the 
directions of the general sales agent, locate markets for sales. They will re- 
ceive moneys to be paid for the property and will deposit and account for 
same according to the rules of the Treasury Department and of their re- 
spective departments. They will account for property disposed of in ac- 
cordance with the established rules of their respective departments. 



UNITED STATES LIQUIDATION COMMISSION. 95 

(E) In the absence of express directions by tbe Coniniission to the contrary, 
all sales will be made by or under the direction of the general sales agent of the 
S. O. S., who will have agents at various places in Europe, and will locate and 
develop markets for all classes of pr(»perty that may be offered for sale. Re- 
ports with reference to all classes of property of the A. E. F., available for sale, 
will l»e made to the general sales agent and by him communicated to the Com- 
mission. He will properly advertise all sales and take measures to prevent 
competitive selling by the several services. He will, under the general super- 
vision of the ('(mimission. conduct preliminary negotiations with probaI)le 
buyers, giving them such inf()rnmti(Mi as they may require to enable them to 
submit offers of purchase; and will consummate sales under the general direc- 
tion of the Commission. 

(F) Communications between the Commission and the various services of 
the S. O. S. shall either pass through the appropriate representative of the 
commanding general. S. O. S. or, if the communication is direct, such repre- 
sentative shall be advised thereof. The appropriate representative in all mat- 
ters of claims shall be the finance officer ; in all matters of sale, he shall be the 
general sales agent. The finance officer and the general sales agent shall cir- 
culate among all interested departments or agencies of the S. O. S. for their 
guidance, all important rulings, decisions, or statements of ])o]icy of the Commi.s- 
sion, having a general application. 

(G) This order does not affect the payment of debts for services performed 
or property delivered, nor, until further orders of the Commission, shall any- 
thing herein contained affect the powers and functions of the R. R. & C. Service, 
which shall continue in effect under existing orders or under such subsequent 
orders as may hereafter be issued by the commander-in-chief or by the com- 
manding general, S. O. S. 

(H) Any power or authority herein assigned to the general sales agent, the 
finance officer, or tlie chiefs of services, or to their subordinates, may be ex- 
tended, withdrawn or modified at will by the Commission, or exercised directly 
by it, when, in its judgment, such action is desirable. The powers and authority 
as regards sales, granted herein to the Services or their representatives, may be 
exercised by the general sales agent, when, in his opinion, the best interests of 
the Government will be served thereby, 

3. All orders or parts of orders in conflict with the above instructions are 
hereby revoked, 

4, Section I, General Orders, No. o9, S. O. S., A. E. F. (1918), is revoked and 
the Advisory Liquidation Board therein provided for is dissolved. 

By connnand of Maj. Gen. Harbord : 

W. D. Connor, Chief of Staff. 
Official : 

L. H. Bash, Adjutant General. 



APPENDIX VI. 

The Categories. 



Clothing and textiles : 

A. Cotton and woolen materials, raw and fabricated. 

B. Clothing, caps, boots, wearing apparel, and insignia. 

C. Blankets, mattresses, pillows, and bedding. 

D. Carpets, rugs, linoleum, and draperies. 

E. Tents, tarpaulins, and tent accessories. 

F. Jute, bagging, sacks, and burlap. 



96 u:nited states liquidation commission. 

II. Subsistence supplies : 

A. Flour. 

B. Fresh, smoked, and cured meats. 

C. Fresh fruits and vegetables. 

D. Canned goods. 

E. Other food supplies. 

F. Tobacco, cigarettes, cigars, and smokers' articles. 

G. Hay, feed, and other forage. 
H. Coal and coke. 

I. Other fuel. 

III. Kitchen utensils and household furnishings : 

A. Kitchen and dining-room furniture. 

B. Cooking stoves and appliances. 

C. Heating stoves and appliances. 

D. Household and cooking utensils. 

E. Tableware and cutlery. 

F. Miscellaneous house and camp articles and supplies. 

G. Beds, cots, and other furniture. 

IV. Machinery, metals, tools, and hardware : 

A. Steam engines, boilers, and parts. 

B. Air-compressor parts. 

C. Refrigerating machinery and supplies. 

D. Machines, tools, and other power machinery and parts. 

E. Other shop and foundry equipment. 

F. Gas and gasoline engines and parts. 

G. Construction contractors' machinery and plants. 
I. Metals, raw and fabricated. 

L. Pipe and pipe fittings. 

M. Wire rope and guy wire. 

N. Small tools and machines. 

O. Nails, bolts, screws, rivets, nuts, and washers. 

P. Locks, hinges, and other building hardware. 

Q. Lamps and lanterns and parts. 

R. Picks and shovels. 

S. Blacksmith tools. 

T. Belting and packing. 

U. Hemp, rope, cordage, and twine. 

V. Tanks, cans, and buckets (metal). 

W. Safes and steel cabinets. 

X. Pumps and water-supply apparatus. 

Y. Miscellaneous materials and supplies. 

Z. Horseshoes and nails. 
AA. Agricultural implements, machinery, and appliances. 
BB. Hose, nozzles, couplings, and fastenings. 

V. Building materials : 

A. Cement. 

B. Lime. 

C. Sand, gravel, and crushed rock. 

D. Brick and tile. 

E. Roofing materials. 

F. Window glass. 

G. Other materials. 



UNITED STATES LIQUIDATION COMMISSION. 97 

VI. Lumber aud other forest products: 

A. Rough and milled lumber. 

B. Ties. 

D. Piling. 

E. Telephone and telegraph poles. 

F. Bridge timbers. 

G. Stake and fence posts. 
H. Trench framing timbers. 
J. Brackets and cross arms. 
K. Other wood products. 

VII. Railway and dock equipment: 

A. Locomotive and cars. 

B. Locomotive cranes. 

C. Work equipment (miscellaneous). 

D. Rail. 

E. Frogs and switches. 

F. Other track material. 

G. Hoisting and conveying machinery. 
H. Other railroad and dock equipment. 
J. Floating equipment. 

VIII. Transport equipment : 

A. Automobiles and motor trucks. 

B. Tires and tubes. 

C. Automobile parts. 

D. Automobile accessories and tools. 

E. Bicycles and motor cycles and supplies. 

F. Horses and mules. 

G. Harness and saddlery, 

H. Wagons, carts and trailers. 

J. Wagon accessories and miscellaneous supplies. 

IX. Hospital and toilet supplies and chemicals : 

A. Drugs and medicines (Medical Department). 

B. Surgical instruments (Medical Department). 

C. Hospital apparatus and supplies (Medical Department). 

D. Chemicals and disinfectants. 

E. Soaps and other toilet articles and preparations. 

F. Ordnance and Gas Service chemicals, 

X. Photographic, measuring, and musical instruments : 

A. Cameras. 

B. X-rays and supplies. 

E. Photographic material and supplies. 

F. Surveying instruments and compasses. 
H. Field glasses and telescopes. 

I. Drafting instruments. 
J. Clocks and watches. 
K. Other instruments and supplies. 
L. Musical instruments. 
XL Electrical equipment and supplies. 

A. Dynamos. 

B. Generator sets. 

C. Motors, 

D. Transformers. 
183176—20 7 



98 UNITED STATES LIQUIDATION COMMISSION. 

XI. Electrical equipment and supplies — Continued. 

E. Interior wiring supplies. 

F. Switchboards and accessories. 

G. Line materials and supplies. 

H. Copper and iron wire and cable. ^ 

I. Batteries, bells, buzzers, and push buttons. 

J. Insulating materials. 

K. Telephone and telegraph equipment and accessories. 

L. Electric lamps. 

M. Other apparatus and equipments. 

N. Wireless apparatus and equipments. 

XII. Oils, gasoline, and paints: 

A. Gasoline. 

B. Other fuel oils. 

C. Lubricating oils. 

D. Lubricating greases. 

E. Linseed oil. 

F. Turpentine. 

G. Color materials and mixed paints. 
H. White and red lead. 

K. Vai'uishes and shellacs. 

L. Painters' tools and supplies. 

XIII. Ordnance and gas equipment and supplies : 

A. Guns and accessories. 

B. Gun carriages and caissons. 

C. Rifles and pistols. 

D. Ammunition. 

E. Target supplies. 

F. Gas masks and other protecting devices. 

G. Flame throwers, hand grenades, and gas bombs. 
H. Other equipment and supplies. 

XIV. Blasting apparatus and supplies: 

A. Dynamite. 

B. Powder. 

C. Blasting appliances and accessories. 

XV. Printing plant and supplies: 

A. Printing presses and appliances. 

B. Paper cutters, rulers, and folders. 

C. Printers' inks. 

D. Type. 

E. Printing paper. 

F. Other printing-office supplies. 

XVI. Office fixtures, stationery, and supplies: 

A. Office furniture and fixtures. 

B. Pencils, pens, and ink. 

C. Paper and envelopes. 

D. Carbon paper. 

E. Typewriters and supplies. 

F. Drafting-room material. 

G. Blackboard and chalk. 
H. Miscellaneous supplies. 
I. Blank and ruled books. 

J. Calculating and numbering machines. 
K. Duplicating machines and supplies. 
L. Rubber stamps and pads. 



UNITED STATES LIQUIDATION COMMISSION. 99 

XVII. Hides and leather: 

A. Hides. 

B. Leatlier. 

C. Leather articles. 

XVIII. Air Service apparatus and equipment: 

A. Aeroplanes and appliances. 

B. Balloons and appliances. 

C. Hangars and sheds. 

D. Aeronautical textbooks and publications. 

E. Other apparatus and supplies. 



100 



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UNITED STATES LIQUIDATION COMMISSION. 
APPENDIX IX. 



103 



Form of " Receipt " Given by French in Taking Over United States Stocks 

Before the Sale. 



(place.) 



(LOCAEITE.) 



1. Be it known that on this 

day of , 1919, the War 

Department of the United States of 
America has delivered to tlie Govern- 
ment of France the property described 
and the location of which is men- 
tioned or fixed in the attached in- 
ventory, marked for identification 
" Exhibit A," the bottom of eacli slieet 
being initialed by the undersigned 
American and French officers, and 
made a part hereof. 

2. From and after the date hereof 
the Frencli Government will hold the 
said property for, but without expense 
to, the United States of America, sub- 
ject to the directions of the United 
States Liquidation Commission, War 
Department, pending negotiations be- 
tween the said Commission and repre- 
sentatives of the French Government 
for its purchase by the French Gov- 
ernment. 

For the War Department of tlie 
United States of America. 

By 

(American Officer) 
For the Republic of France. 

By 

(French Officer.) 



1. U est reconnu que ce jour 

de 1919, le Department 

de la Guerre des Etats-Unis d'Ame- 
rique a delivre an Gouvernement Fran- 
cais la proprigte decrite et dont la lo- 
cation est mentionnee oil fixee dans 
I'inventaire ci-joint, marque pour iden- 
tification " Piece A," le bas de chaque 
page portant les initiales des officiers 
Americains et Frangais soussignes, et 
formant partie de ce recu. 

2. D'a partir de la date ici portee, la 
Gouvernement Fran<jais retiendra la 
dite propi§te pour le Gouvernement 
des fitats-Unis d'Amerique, mais sans 
frais pour lui, soumis aux instructions 
de la Commission de Liquidation des 
iStats-Unis, Department de la Guerre, 
en attendant des negociations entre le 
dite Commission et les representants 
du Gouvernement Frangais pour 
I'achat de cette propri^te par le Gou- 
vernement Frangais. 

Pour le Department de la Guerre 
des Etats-Unis d'Amerique. 

Par 

(Officier Americain.) 
Pour la Republique Frangais. 

Par 

(Officier Frangais.) 



APPENDIX X. 

(1) Contract of Sale, United States to France, 
The Bulk Sale to France. 



August 1, 1919— 



This contract entered into this first 
day of August A. D. 1919 by and be- 
tween the United States of America 
(hereinafter called America), acting 
through the United States Liquidation 
Commission — War Department, of the 
one part; and the Republic of France 
(hereinafter called France), acting 



Entre les Etats-Unis d'Amerique 
(ci-apres denommee Amerique) et par 
I'intermediaire de la United States 
Liquidation Commission, War Depart- 
ment, d'une part, et la Republique 
Francaise (ci-apres denommee France) 
et par I'intermediaire de M. le Sous- 
Secretaire d'Etat aux Finances d'autre 



104 



UNITED STATES LIQUIDATION COMMISSION. 



through Le Sous-Secretaire d'Etat aux 
Finances, of the other part, wit- 
nesseth : 

That whereas, America is the owner 
of certain property now located iu 
France which was imported into, ac- 
quired or constructed in France since 
April 6, 1917, by the War Department 
of the United States of America (here- 
inafter called War Department) ; and 

Whereas, it is deemed advantageous 
to both Governments that America sell 
and France purchase said property; 

Now therefore, in consideration of 
the premises and for the other consid- 
erations herein stated, it is mutually 
agreed, as follows : 



part, il a ete conclu a la date du 1" 
Aout 1919 le contrat suivant : 

Etant donne que I'Amerique possede 
en France une certaine quautite de 
biens en exeedent qui out ete importes, 
achetes ou construits en France depuis 
le 6 Avril 1917 par le Department de la 
Guerre des Etats - Unis d'Amerique 
(ci-apres denomme; War Department), 
et etant donne qu'il est juge avanta- 
geux pour les deux Gouvernements 
que I'Amerique vende et que la France 
achete les dits biens, la convention sui- 
vante a ete agrees d'un commun accord 
en egard aux considerations ci-dessus 
et aux considerations exposees dans le 
present document : 



ABTICLE ONE. 

Description of property. — America 
agrees to and does hereby sell to 
France without warranty of quantity, 
quality or condition, and subject to the 
reservations, exceptions and conditions 
hereinafter set forth, and France 
agrees to and does hereby purchase 
from America, all of the property now 
located in France and now owned by 
the War Department, described as fol- 
lows : 

a. All of the buildings, structures, 
docljs, warehouses, telephone and tele- 
graph lines, railroads and other instal- 
lations of every kind and character 
constructed or acquired in France since 
April 6, 1917, together with the leases, 
appurtenances and equipment apper- 
taining thereto ; and 

b. All of the movable property, con- 
sisting of material, equipment and sup- 
plies imported into or acquired in 
France since April 6, 1917. 



ABTICLE I. 

Description du materiel. — L'Amer- 
ique consent a veudre et vend effective- 
ment a la France par le present acte 
sans guarantie de quantite, de qualite, 
ou d'etat actuel et sous reserve des 
exceptions et des conditions enoncees 
ci-apres et la France accepte d'acheter 
effectivement par le present acte a 
I'Amerique tous les biens actuellement 
situes en France et appartenant au 
War Department dont la description 
suit: 

a. Tous les batiments, constructions, 
docks, magasins, lignes telephoniques 
et telegraphiques, lignes de chemins de 
fer et autre installations de tout genre 
et de tout nature construits ou acquis 
en France depuis le 6 Avril 1917, en 
meme temps que les baux, les depend- 
ances et amenagements y correspond- 
ant. 

b. Tous les biens mobiliers consist- 
ant en materiels, equipements et ap- 
provisionnements importes ou achetes 
en France depuis le 6 Avril 1917, 



ARTICLE TWO. 

Exceptions and reservations. — 
America reserves from the property 
described in Article One hereof (which 
is sold subject to the following ex- 
ceptions and conditions) property as 
follows : 



ABTICLE II. 

Exceptions et reserves. — L'Amerique 
excepte des biens decrits dans I'Article, 
ci-dessu, (lesquels sont vendus sous les 
reserves et conditions indiquees ci- 
apres), ceux de ces biens dont la de- 
scription suit : 



UNITED STATES LIQUIDATION COMMISSION. 



105 



a. All animals. 

b. Uudelivered material, equipment 
and supplies which America has 
already sold or contracted to sell (1) 
to other nations, (2) to relief asso- 
ciations or organizations, (3) to 
Spanish Company for export to 
and distribution in Spain, and 
(4) to an English syndicate of 
motor transport of English manufac- 
ture only, for return to and distribu- 
tion in England, all aggregating in 
selling value approximately Seventy- 
seven Million, Two-hundred and 
Sixty-five Thousand, Five-hundred and 
Ninety-seven Dollars and Eighty-three 
cents ($77,265,597.83) ; 



c. Equipment, material and supplies 
forming a part of the equipment of 
the individual soldier or of the mili- 
tary units which have been or may be 
hereafter withdrawn from Prance for 
return to the United States : 

d. Material, equipment and supplies 
now in France needed by America and 
already ordered returned to America 
for the ufee of the War Department, 
of the estimated cost value of fifteen 
million dollars ($15,000,000.00). 



e. Subsistence and supplies neces- 
sary to meet the requirements of the 
American Expeditionary Forces and 
other War Department organizations 
so long as they are in France, which 
subsistence and supplies are now 
located both in depots and points other 
than depots ; such stocks now in 
depots being of the estimated cost 
value of Four Million Dollars 
($4,000,000.00) ; and 



f. Medical, surgical and hospital 
supplies and supplementary and die- 
tary foodstuffs needed in the treat- 
ment of the sick and injured, reserved 
for the use of the American Red Cross 



a. Tous les animaux, 

b. Les materiels, equipements, ap- 
provisionnements que I'Amerique a 
deja vendus ou qu'elle s'est engagee a 
vendre, mais qu'elle n'a pas encore 
livres (1) a d'autres Etats (2) a des 
associations ou organizations chari- 
tables (3) a une Compagnie Espagnole 
aux fins d'exportation et de distribution 
en Espagne, et (4) a un syndicat Ang- 
lais, en ce qui concerne du materiel 
automobile, uniquement de fabrication 
Anglaise, materiel destine a etre rem- 
ports et distribue en Angleterre, la 
valeur marchande de tout ce qui 
est indique ci-dessus s'elevant ap- 
proximativement a Soixante dix-sept 
millions, deux cent soixante cinq 
mille, cinq cent quatre vingt-dix 
sept dollars quatre vingt trois cents 
($77,265,597.83). 

c. L'Equipement, le materiel et les 
approvisionements qui font partie de 
I'equipement individuel de riiomme ou 
des unites militaires qui ont ete ou 
seront retires de France pour retour- 
ner aux Etats-Unis. 

d. Les materiels, equipments et 
approvisionnements actuellement en 
France necessaires a I'Amerique et qui 
d'apres des instructions precedement 
recues doivent etre expedies aux Etats- 
Unis pour I'usage du War Department 
et dont L'estimation au prix de revient 
s'eleve a quinze millions de dollars 
($15,000,000.00). 

e. Les fournitures et approvisionne- 
ments necessaires pour subvenir aux 
besoins des Forces Expeditionnaires 
Americaines et des autres organisa- 
tions dependant du War Department 
tant qu'elles resteront en France, 
fournitures et approvisionnements qui 
sont actuellement situes dans des 
depots et dans des points autres que 
les depots ; le total des approvisionne- 
ments dans les depots etant estime, au 
prix de rivient a quatre millions de 
dollars ($4,000,000.00) ; et 

f. Les approvisionnements medicaux, 
chirurgicaux et hospitallers ainsi que 
les denrees alimentaires de regime 
necessaires dans le traitement des 
malades et blesses, reserves pour I'usage 



106 



UNITED STATES LIQUIDATION COMMISSION. 



in connection witli its activities in 
Eui'ope, of the estimated cost value of 
ten million dollars ($10,000,000.00). 
Should the Secretary of War of the 
United States of America, or his 
authorized representative, hereafter 
request that France re-sell to America 
additional property of similar nature 
for the use of the American Red 
Cross, then in such event France 
agrees to re-sell same to America so 
long as it is held by France unsold, 
delivering it to the American Red 
Cross at the same price at which 
France has valued such property in 
making this purchase, so that the re- 
sale shall be at cost to France without 
profit. America agrees to give France 
credit on the bonds, hereinafter men- 
tioned, for any property so re-sold. 



de la Croix-Rouge Americaine pour son 
oeuvre en Europe, dont I'ensemble est 
evalue, au prix de revient, a 10 mil- 
lions de dollars ($10,000,000.00). Si 
le Secretaire d'Etat a la Guerre des 
Etats-Unis d'Amerique ou son Repre- 
sentant autorise demandait dans la 
suite a la France de lui revendre pour 
I'usage de la Croix Rouge Americaine 
un surplus d'Approvisionnements du 
meme genre, la France consent dans ce 
cas a revendre ces approvisionnements 
aussi long temps qu'elle les conservera 
invendus, en les livrant a la Croix- 
Rouge Americaine au meme prix que 
la France I'a estime en effectuant son 
achat, de telle sorte que la revente 
sera faite par la France au prix cou- 
tant sans benefice. L'Amerique est 
d'accord pour crediter la France sur 
les obligations dont il est question plus 
loin pour tout le materiel revendu de 
la sorte. 



ARTICLE THREE. 



ARTICLE III. 



Conskleration. 



Prix et enffagcments specianx. 



a. Bonds. — In addition to the other 
considerations herein enumerated, 
France agrees to pay for the above 
described property the sum of four 
hundred million dollars ($400,000,000) 
to be evidenced by bonds of the Re- 
public of France, dated August 1. 1919, 
bearing interest from August 1, 1920, 
at the rate of five per centum (5%) 
per annum, interest payable in equal 
semi-annual installments on February 
1st and August 1st in each year, said 
bonds maturing ten (10) yeai's after 
date, both principal and interest pay- 
able in dollars to the United States of 
America, or ijs assigns, at Washing- 
ton, D. C, in gold coin ; or, at the elec- 
tion of America, payable in francs of 
the Republic of France at the cable 
buying rate as fixed by the Federal 
Reserve Bank of New York on the 
New York market at noon of the due 
date thereof. Said bonds shall be in 
such form and of such denominations 
as may be prescribed by agreement be- 



a. Obligations. — En plus des autres 
engagements enumeres ici, la France 
consent a payer pour le materiel de- 
crit plus haut, la somme de quatre 
cents millions de dollars ($400,000,- 
000.00) representes par des obliga- 
tions de la Republique Francaise, en 
date du ler Aout 1919. portant interet 
du ler Aout 1920 au taux de cinq pour 
cent (5%) I'an, Interets payable en 
paiements a termes semestriels et 
egaux, le ler Fevrier et le ler Aout de 
chaque anne, les dites obligations ar- 
rivant a amortissement dix (10) ans 
apres la date d'emisslon, le capital et 
les interets payables en dollars aux 
Etats-Unis d'Amerique ou a ceux qu'ils 
designeront a Washington, District of 
Columbia, en monnaie d'or, ou au choix 
de I'Amerique, payables en francs de la 
Republique Francaise au taux d'achat 
fixe par cable par la Federal Reserve 
Bank de New York, sur le marche 
de New York, a midi de la date 
d'e.s-.*!cheance. Les dites obligations 



UNITED STATES LIQUIDATION COMMISSION. 



107 



tween the Treasury Departments of 
America and of France, and shall be 
delivered within ninety (90) days 
from August 1st, 1919. 



b. Claims and rentals. — France as- 
sumes the payment of all rentals 
which shall accrue subsequent to 
August 1st, 1919, on account of the 
occupancy of the installations of ev- 
ery character purchased by it from 
America. All requisition, damage and 
restoration claims of every nature 
whatsoever connected with or growing 
out of the use and occupation of said 
Installations have already been taken 
into account by France in estimating 
the utilization value of .said installa- 
tions, and deduction has been made 
accordingly from the purchase price 
mentioned in subdivision " a" of this 
Article Three hereof; and France as- 
sumes the payment of and agrees to 
hold America harmless against all 
such claims. 



c. Waiver of claims. — France waives 
all claims of every nature which it has 
or may have against America for Na- 
tional taxes on account of the importa- 
tion of or transactions in relation to 
property heretofore imported or ac- 
quired by America in France since 
April 6th, 1917. 



seront emises dans la forme et sous la 
denomination qui sera prescrite d'ac- 
cord entre les Ministres des Finances 
des Gouvernements Americain et Fran- 
cais. L'emission des obligations aura 
lieu dans les quatre-vingt-dix (90) 
jours a partir de la date du ler 
Aout 1919. 

b. Reclamations et locations. — La 
France prendra a sa charge le paie- 
ment a partir de la date du ler Aout 
1919, de tons les loyers d'occupation 
d'installations de toute nature qu'elle 
achete aux Etats-Unis d'Amerique. 
Tous rais de requisitions, de dom- 
mages et de remise en etat de toute 
nature qui peuvent etre dus pour 
I'usage et I'occupation de ces installa- 
tions, ont ete deja pris en considera- 
tion par la France dans I'estimation 
qu'elle a faite de la valeur d'utilisa- 
tion des dites installations et une de- 
duction correspondante a ete operee 
sur le prix d'aehat mentioune dans la 
sub-division " a " de I'Art. Ill ci- 
dessus ; En consequence la France 
rendre a sa charge le paiement de ces 
frais et s'en gage a ce qu'aucune re- 
clamation ne soit faite a I'Amerique a 
leur sujet. 

c. Renoncement aux Reclaniatioihs. — 
La France renonce a toutes reclama- 
tions de toute nature qu'elle a ou peut 
avoir contre I'Amerique pour des 
taxes d'Etat provenant d'importations 
ou de transactions relatives aux biens 
jusqu'ici importes ou achetes par 
PAmerique en France, depuis le 6 
Avril, 1917. 



ARTICLE FOUR. 



ARTICLE IV. 



Title and possession. — a. Title to the 
property hereinbefore mentioned, sold 
by America to France, shall pass to 
France upon the signing of this con- 
tract. Delivery of possession shall be- 
gin immediately and shall be com- 
pleted within thirty days from August 
1st, 1919. So long as said property is 
in the possession of America it shall 
be held at the joint risk of America and 
France ; provided, however, that the 



Titre et possession. — a). La pro- 
priete des biens vendus par le present 
acte sera transferee a la France par la 
signature de ce contrat. La prise de 
possession commencera immediate- 
ment, et devra etre terminee dans les 
trente (30) jours a partir du ler Aout 
1919. Aussi longtemps que ces biens 
seront conserves par I'Amerique, il le 
seront aux risques communs de 
I'Amerique et de la France, pourvu 



108 



UNITED STATES LIQUIDATION COMMISSION. 



risk to America sliall terminate abso- 
lutely with August 31st, 1919, whether 
delivery has at that time been taken 
by France or not. At the time of de- 
livery of possession a receipt in sub- 
stantially the following form shall be 
signed by representatives of the re- 
spective Governments : 

"Be it known that on this 

day of , 1919, the United 

States of America, War Department, 
has delivered to the accredited repre- 
sentative of the Republic of France, 
on authority of the United States 
Liquidation Commission — War Depart- 
ment, all the property, both fixed and 
movable, belonging to the United 
States of America, War Department, 
embraced or located in installation, 
depot or park known as De- 
partment Project No. 

as shown on the Jadwin Report of In- 
stallation, page — . 

" Executed in parts, each hav- 
ing the full force and effect of an 
original." 

b. France hereby grants to America, 
rent free, the temporary use of such 
installations and moveables purchased 
by France in accordjance ^ith the 
terms of this contract as may be re- 
quired by the American Expeditionary 
Forces and other War Department Or- 
ganizations so long as they are in 
France or as may be necessary to 
complete the liquidation of the affairs 
of the War Department; provided, 
however, that so long as such installa- 
tions and movables are retained by 
America for its use under the terms of 
this subdivision " b " of Article Four 
hereof, they shall be held at the risk of 
America. 



In witness whereof, on the day and 
year first above written, this contract 
has been executed in four parts, each 
having the full force and effect of an 
original, by the United States of 
America, acting through the United 
States Liquidation Commission— War 



toutefois que le risque supporte par 
I'Amerique se termine d'une maniere 
absolue au 31 Aout 1919, que la prise 
de possession ait ete, a cette date, 
operee ou non par la France. Au mo- 
ment de la prise de posession un recu 
dans la forme suivante sera signe par 
les Representants des Gouvernements 
interesses : 

" Qu'il soit connu que le jour 

de 1919, les Etats-Unis 

d'Amerique, Ministere de la Guerre, out 
remis au Representant accredite de la 
Republique Francaise, sur ordre de la 
Conniiission de Liquidation des Etats- 
Unis, Minisfere de la Guerre, tout le 
materiel, fixe et transportable, apperte- 
nant aus E'tats-Unis d'Amerique, De- 
partment de la Guerre, compris ou 
situe dans I'installation, le depot ou 

le par connu sous le nom de 

Department Project No. 

comme indique sur le Rapport de 
Jadwin des Installations, page — . 

" Execute en exemplaires 

chacun ayant pleine vigueur et force 
d'original." 

b. ) La France consent par le present 
contrat a accorder a I'Amerique, sans 
paiement de loyer, I'usage de telle par- 
tie des installations et des bieus mau- 
bles achetes par la France suivant les 
termes de ce contrat, qui pourra etre 
necessaire aux Forces Expedition- 
naires Americaines et autres Services 
du War Department et sera demandee 
par eux, aussi longtemps que cela sera 
juge necessaire pour terminer la liqui- 
dation des affaires du War Depart- 
ment ; a condition toutefois qu'aussi 
longtemps que ces installations et ma- 
teriels seront conserves par I'Amerique 
pour son usage, suivant les termes de 
la subdivision " b " de TAx't. IV ci- 
dessus, ils le seront aux risques de 
I'Amerique. 

En foi de quoi, a la date de I'anne 
indiquee ci-dessus, entete ce contrat a 
ete dresse en quatre exemplaires, pour 
valoir chacun d'eux comme original 
par les Etats-Unis d'Amerique, agis- 
sant par I'intermediaire de la Commis- 
sion de Liquidation des Etats-Unis, 



UNITED STATES LIQUIDATION COMMISSION. 109 

Department, Edwin B. Parker, Chair- Miuistere de la Guerre, Edwin B. 
man ; and by tlie Republic of France, Parker, President ; et par la Repub- 
acting through le Sous-Secretaire lique Francaise, agissant par I'inter- 
d'Etat aux Finances, Paul Morel. mediaire du Sous-Secretaire d'Etat aus 

Finances, Paul Morel, 

United States of America, 
By E. B. Pakker, 
Chairman, United States Liquidation Commission — War Department. 

Republic of France. 
By P. Morel, 
Le Sous-Secretaire d'Etat aux Finances. 

(2) The Ratification of the Bulk Sale Contract. 

Republic of France, Law of the 21st October, 1919. 

Law ratifying the agreement entered into August 1, 1919, between the United 
States of America and the French Republic for the sale of American stocks. 

The Senate and the Chamber of Deputies have adopted, 

The President of the Republic promulgates the law, whereof the terms 
follow : 

Sole Article : The agreement entered into August 1, 1919, between the United 
States of America and the Republic of France for the purchase by France of 
the surplus property imported, purchased, or constructed in France since April 
6, 1917, by the War Department of the United States of America, is hereby 
voted. 

The present law considered and adopted by the Senate and by the Chamber 
of Deputies shall be executed as a law of the State. 

Done at Paris, 21 October, 1919 : 

By the President of the Republic : . 

The President of the Council, Minister of War, 

Georges Clemenceau. 

The Minister of Finance : 

L. L. Klotz. 

Note. — A further law provides for a separate accounting in disposing of these 
stocks; and after the deduction of direct expenses, a turning of the proceeds 
into a special fund for the payment of principal and interest on the purchase 
debt. 

(3) Letter of Transmittal of Contract, Parker to Morel, August 4, 1919. 

Subject : Sale of property by the United States War Department to the Govern- 
ment of France. 

M. Paul Morel, 

Le Sous-Secretaire d'Etat aux Finances, Paris, France. 
My Dear Monsieur Morel : Complying with my promise to you made in con- 
ference had in your office Friday afternoon, August 1, I now have pleasure in 
handing you herewith draft of contract to be entered into between the United 
States of America on the one part, and the Republic of France on the other part, 



110 UNITED STATES LIQUIDATION COMMISSION. 

for the sale of property by the War Department of the United States to the 
Government of France. 

You will note that the contract follows very closely the language of your 
memorandum, which I received on August 1, and which was in response to my 
letter of July 25. There are a few provisions, such as that dealing with 
" Waiver of claims," constituting subdivision " c " of Article Three, not em- 
bodied in your memorandum, but which you will find covered in the corre- 
spondence leading up to this agreement and which I am sure are clearly under- 
stood between us. 

AVe both agree that it is desirable to keep this formal contract as simple as 
practicable and not encumber it with details, and to tliat end I am not under- 
taking to embody in the contract the following : 

1. The estimated selling value of the undelivered material, equipment, and 
supplies which America has sold or contracted to sell, aggregating approxi- 
mately $77,265,297.83, is estimated to approximate 75 per cent of the cost price 
as stated on the American inventories, and these materials, equipment, and sup- 
plies, based on sucli values, are distributed between the several inventoried 
categories, substantially as follows: 

Category 1 .$20, 207, 704. 75 

Category 2 35, 402, 769. 36 

Category 4 1, 742, 860. 00 

Category 7 2, 113, 750. 00 

Category 8 9, 722, 763. 72 

Category 9 4, 637, 500. 00 

Category 12 285,000.00 

Category 13 3, 153, 250. 00 

Total 77, 265, .597. 83 

2. It is, of course, understood that upon the taking over of installations 
France will grant, rent free, to America or purcliasers from it the temporary 
use for a reasonable time of such installations as may be necessary for ware- 
house and storage space for material, equipment, and supplies reserved from 
the sale to France and mentioned in Article Two of the agreement dated August 
1, 1919. If you desire to set a time limit on such use, I suggest October 1, 1919. 

3. We will, of cour.se, keep accurate account of all deliveries made on unful- 
filled contracts on and after July 25, the date on which I sent you statement 
of estimated selling value of undelivered material. Conversely, should we 
import into France any material, equipment, or supplies on or after that date, 
they will not be included in the bulk sale to France, 

4. In the settlement between our two Governments for artillery and ammuni- 
tion purchased by America from France an agreement has been reached by 
which America obligates itself to pay France a very large sum. A considerable 
number of these artillery units are only now being delivered, and some of them 
are yet to be finished and delivered. We are anxious to take delivery and return 
these ordnance supplies and equipment to tlie United States at the earliest possi- 
ble moment. It is, of course, understood that these artillei'y units which France 
is selling to America are not included in the bulk sale to the French or in the 
material, equipment, and supplies reserved for return by America to the United 
States estimated in the contract at $15,000,000. I simply mention this here out 
of abimdance of caution to avoid any possible misunderstanding in the future. 

5. You may treat this letter as supplementary to and explanatory of the 
formal agreement, and upon its acceptance by you it will bind both parties 
thereto. 



UNITED STATES LIQUIDATION COMMISSION. Ill 

I presume it is desirable tliat the contract should be written in both French 
and English in parallel columns, and if this is agreeable to you I will have it 
prepared accordingly. 

I am sure that you will agree with me that i-t is desirable that the contract 
should be promptly executed, and to that end I hold myself in readiness to 
meet with you at any time to-day or to-morrow. 
Yours very sincerely, 

(Signed) Edwin B. Parker, 

Chairman, United States Liquidation Commission — War Department. 

(4) Sl'PPLEMENT TO LETTER OF TRANSMITTAL, AUGUST 11, 1919. 

Subject : Sale of property by the United States AVar Department to the Govern- 
ment of France. 

M. Paul Morel, 

Le Sous-Sec7-etaire d'Etat aiix Finances, Paris, France. 

My Dear Monsielr Morel : In the conference had with you on the afternoon 
of August 7 you stated that the terras set forth in my letter to you of August 4, 
supplementary to and explanatory of the formal agreement, bearing date of 
August 1, 1919, Avere acceptable to you with the following changes : 

(a) At the end of and as a part of paragraph (1), page 2, there should be 
added the following: 

" The material, equipment, and supplies necessary to complete the contracts of 
sale mentioned shall be for each category selected as follows : If the materials 
are classified according to condition as new, good, worn, much worn, etc., the 
selection will be made for each category, and for each class in that category, 
in the proportion in which the various classes enter into the category. If the 
materials of a category are not classified, the selection shall be an average of 
the qualities in such category." 

(h) At the end of paragraph 3 change the period to a semicolon, and add 
the words : 

" Provided America will not import into France any surplus War Department 
material, equipment, or supplies for sale in France, without first giving to 
France an opportunity to purchase same." 

Will you please treat this letter as supplementary to my letter to you of 
August 4, above mentioned? 
Yours very sincerely, 

(Signed) Edwin B. Parker, 

Chairman, United States Liquidation Commission — War Department. 



APPENDIX XL 

1. Letter from Mr. Hoover to Judge Parker. 

Supreme Economic Council, Food Section, 

March 11, 1919. 
Chairman United States Liqltidation Commission — War Department, 

Paris, France. 
Dear Judge Pabker : The clothing relief to tlie liberated countries of Europe 
is just as important as food relief, and we have already made considerable pur- 
chases from the Army for Belgium and northern France, and have even bought 
and shipped from the United States. The prices, however, on the Army mate- 



112 UNITED STATES LIQUIDATION COMMISSION. 

rials have been extremely high — higher than from the trade — and would only 
be accepted under force majeure. The Governments who buy them necessarily 
have to re-sell to their public and they are very wary as to buying in considera- 
able amounts at the present prices, as private firms, which are rapidly re-open- 
ing, are able to place similar goods at lower pi'ices. If, on the other hand, rea- 
sonable prices can be made and credits given, we can go a long ways toward 
relieving the Army of its clothing and we could also relieve it of a large amount 
of iron rations. The Army have a number of " Lake " boats, from 2,000 to 3,000 
tons carrying capacity, at present in the coal trade, which they are now ready 
to relinquish to return to the States. If they would undertake to load a cargo 
of these boats with clothing supplies at reasonable prices for each, Roumania, 
Greater Serbia, Poland, and a further cargo of iron rations for Poland, we 
could dispose of this material for you at once. We have a general contractoral 
arrangement with these Governments by which they accept our invoices for such 
cargoes, provided we are willing to say that they are reasonable prices, and 
will undertake to give any sort of obligation that we may call foi'. None of 
these Governments, of course, have any money, and if the Army will take a 12- 
month's treasury bill in each case the whole matter could be put in hand and 
carried through instantly, provided always that the prices are reasonable. I 
understand that the treasury prefers to make advances to these countries with 
which they are to pay for these materials. This is, however, only a question 
of inversion of finance, but I mention it as I understand it is their desire. 
Yours faithfully, 

Heebebt Hoover. 



2. Lettepv fkom the President to Judge Parker. 

The President of the United States of America, 

Paris, 24 March, 1919. 

My Dear Judge Parker : Mr. Hoover has represented to me the critical cloth- 
ing conditions in the liberated countries. He has also presented to me the fact 
that the War Department is possessed of enormous stocks, not only of new 
clothing but of renovated materials. It must be obvious that these renovated 
materials can have but little value in the world markets and that the unused 
materials, purchased and manufactured under war conditions, will soon be 
heavily depreciated by the return of commerce to more normal prices. It 
would appear, therefore, that it is desirable to liquidate these stocks at the 
earliest possible moment. 

It would appear that but little market could be found for such large quan- 
tities of clothing and shoes and similar articles, except through some such relief 
agency as that conducted by Mr. Hoover and, to some extent, this agency may 
be of value in the distribution of the unused material. The sympathetic interest 
which the American people must have in the alleviation of misery amongst the 
liberated people should lead us to entertain the most sympathetic view as to 
prices and terms upon which this uiaterial is disposed of to them. I would be 
glad, therefore, if the Commission could accept as its guiding principle in these 
negotiations the fact that it is not only securing a rapid liquidation of materials 
that may otherwise prove practically unsalable, but also that it has an oppor- 
tunity to perform a fine human service by approaching the matter in the most 
sympathetic mind, and I would be glad if the Commission could see its way to 
very largely accept INIr. Hoover's views as to the terms upon which dealings 
should be undertaken with the liberated peoples. 

Faithfully yours, Woodrow AVilson. 



UNITED STATES LIQUIDATIOIST COMMISSIOIT. 
3. Letter feom Judge Parker to the President. 



113 



Paris, March 25, 1919. 
My Dear Mr. President : It will be the pleasure as well as the duty of this 
'Commission to pursue the course outlined in your letter of March 24 addressed 
to me, in disposing, with Mr. Hoover's assistance, of salvaged wearing apparel 
^nd other materials and supplies of which the liberated countries are sorely 
In need. 

Tours respectfully, Edwin B. Parker, Chairman. 

The President, 

12, Place des Etats Vnis, Paris, France. 



APPENDIX XII. 

The Liberated Nations and Their Commercial Organizations. 

Poland — Polish Relief and Supply Corporation. 

Czechoslovakia — Czechoslovakia Relief Corporation. 

Roumania — The Government. 

Kingdom of Serbs, Croats, and Slovenes — The Government. 

Esthonia — Revalis. 

Ukrainia — Ukrailian. 

Latvia — Central Union Consums. 

Xiithuania — Vilnis. 



APPENDIX XIII. 



United States Liquidation Commission — W. D., 

Office of General Sales Agent, 

Washington, D. C, May 27, 1920. 



TVIemorandum to U. S. Liquidation Commission — W. D. 

1. The following statement shows status of sales of animals in A. 



E. F. 



Purchaser. 



Quantity. 



Total. 



French individuals 

German individuals 

Bavarian Syndicate 

Czechoslovakia ^ 

Polish Relief and Supply Corporation 

French Government 

Belgian G overnment 

Grand total 



69,769 

33,717 

13,039 

10 

5,900 

58,984 

490 



181,909 



§13,903,346.41 

7,243,983.77 

2,293,300.43 

3,870.10 

1,662,000.00 

10,928,714.85 

97,849.46 



35,133,065.02 



E. P. Orton, 
Major, Cavalry, General Sales Agent. 



183176—20- 



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118 UNITED STATES LIQUIDATION COMMISSION. 

APPENDIX XV. 

Contract foe Liquidation of Claims Between United States of America and 
the go^'ernment of the kingdom of belgium, 

This contract entered into tliis seventh day of Novem-ber, one thousand nine 
hundred and nineteen, by and between the United States of America (herein- 
after called the United States), acting through the United States Liquidation 
Commission — War Department, of the first part, and the Government of the 
Kingdom of Belgium (hereinafter called Belgium), acting through the minister 
of finance, of the second part WITNESSETH : 

That whereas Belgium has furnished the armed forces of the United States 
with rail and water transport, the use of locomotives, railway material, and 
other merchandise and services for the use of the American forces in Europe ; 

And whereas the private railroad companies in Belgium have furnished 
certain railroad transportation to the armed forces of the United States, which 
all parties desire to include in this settlement ; 

And whereas the Belgian railroads have presented certain ordres de transport 
signed by American officers which the United States believes should be paid by 
Great Britain under a capitation agreement concerning American troops serving 
with the British Armies ; 

And whereas the Belgian railroads have received from the French railroads 
certain bills for supplies furnished to Belgian locomotives rented to the Ameri- 
can forces, which charges the United States believes are not properly payable 
by Belgium ; 

And whereas the amount of the indebtedness of the United States to Belgium 
by reason of the materials and services referred to in the foregoing paragraphs 
is difficult of exact determination on account of war conditions ; 

And tvhereas the United States has sold to Belgium certain merchandise and 
has performed for Belgium certain services aggregating approximately thirty 
million dollars (30,000,000.00 dollars) ; 

And whereas by a contract dated March first, A. D. one thousand nine hun- 
dred and nineteen, Belgium agreed to give and the United States agreed to 
accept in payment for purchases to the aggregate amount of twenty-four 
million dollars ($24,000,000.00) treasury bills of the Belgian Government, 
payable not later than April tenth, A. D. one thousand nine hundred and twenty- 
two, and secured by a first lien on the portion of the German war indemnity 
payable to Belgium, as more particularly stated in said agreement; 

And iDhereas by a certain other agreement dated August fifth, A. D. one 
thousand nine hundred and nineteen, Belgium agreed to give and the United 
States agreed to accept in payment for sales of subsistence stores, which sales 
aggregate eight million three hundred and ninety-two thousand ninety-seven 
dollars fifty-seven cents ($8,392,097.57) notes of the Belgian Government payable 
on or before August fifth, A. D. one thousand nine hundred and twenty-two, as 
more particularly stated in said agreement ; 

And whereas by a certain other agreement dated August twenty-first, A. D. 
one thousand nine hundred and nineteen, Belgium agreed to give and the United 
States agreed to accept in payment for sales of office fittings at Antwerp, which 
sales aggregate one hundred and ninety-six thousand four hundred and eighty- 
three dollars fifty-seven cents ($196,483.57), notes of the Belgian Government 
payable on or before August twenty-first, A. D. one thousand nine hundred and 
twenty-two, as more particularly stated in said agreement ; 

And tvhereas all parties hereto desire to adjust any and all claims and de- 
mauds of every kind, nature, and description existing between them up to and 



UNITED STATES LIQUIDATION COMMISSIOIT. 119 

including tlie ttiirty-first day of October, A. D. one thousand nine hundred and 
nineteen : 

Noio therefore, in consideration of the premises and tlie other considerations 
herein stated, it is agreed as follows : 

Aeticle One. Belgium agrees to deliver forthwith to the financial requisition 
officer, Paris, or to such other officer as shall be fully designated to receive the 
same, treasury bills or notes to the amount of eighteen million five hundred and 
seventy-four thousand one hundred and thirty-nine dollars seventy-nine cents 
($18,574,139.79), as provided in said agreement of March first, A. D. one thou- 
sand nine hundred and nineteen, and further treasury bills or notes to the 
amount of eight million three hundred and ninety-two thousand ninety-seven 
dollars fifty-seven cents ($8,392,097.57), as provided in said agreement of 
August fifth, A. D. one thousand nine hundred and nineteen, and further treas- 
ury bills or notes to the amount of one hundred and ninety-six thousand four 
hundred and eighty-three dollars fifty-seven cents ($196,^83.57), as provided in 
said agreement of August twenty-first, A. D. one thousand nine hundred and 
nineteen. All of said obligations shall be in form satisfactory to the Treasurer 
of the United States and in accordance with the provisions of the several agree- 
ments above referred to, provided nevertheless that for convenience the parties 
shall be at liberty to make such changes in the form of said obligations in- 
cluding dates for payment of principal and interest as may be mutually agreed 
upon, and including such adjustments as are necessary to arrive at round sums 
for the amounts of said obligations. 

Aeticle Two. In addition to the foregoing payments Belgium releases the 
United States from any and all debts, claims, and liabilities whether in con- 
tract or tort which Belgium now has or may have by reason of any act done 
or engagement entered into on or before the thirty-first day of October, A. D. 
one thousand nine hundred and nineteen, for materials or services furnished 
to or damage done by the American forces in Europe except as hereafter stated. 
In this release are included all claims for transportation furnished to the 
American Red Cross, the American Young Men's Christian Association, the 
American Young Women's Christian Association, the Knights of Columbus, the 
Jewish Welfare Board, and the American Salvation Army. 

Aeticle Thbee. The United States hereby accepts the foregoing obUgations 
and release as full payment for all indebtedness existing between Belgium and 
the American forces in Europe, and hereby releases Belgium from any and all 
debts, claims, and liabilities, whether in contract or tort, which the United 
States now has or may have by reason of any act done or engagement entered 
into on or before the thirty-first day of October, A. D. one thousand nine hun- 
dred and nineteen, for materials and services furnished by or damage done to 
the American forces in Europe except as hereinafter stated. 

Aeticle Foxxr. It is expressly understood that the releases contained in 
Articles Two and Three above do not apply to contracts and other obligations 
entered into, or incurred in the United States, including an advance of money 
by the Belgian Government to the credit of Lieutenant James Pede, Quarter- 
master Corps, on or about July four, one thousand nine hundred and nineteen, 
but cover only transactions between the parties hereto entered into or occurring 
in Europe, including all claims for the cargoes of the steamships Aul)urn and 
Aledo. Neither party hereto will present or prosecute any claim against the 
other for any such transaction occurring on or before October thirty-first, one 
thousand nine hundred and nineteen, except as hereinafter provided. 

Aeticle Five. From the releases contained in Articles Two and Three above 
are hereby excepted the following obligations arising out of transactions prioi 
to October thirty-first, A. D. one thousand nine hundred and nineteen. 



120 UNITED STATES LIQUIDATION COMMISSION. 

A. The obligation of the Belgian Government to furnish and pay the treasury- 
bills or notes stated in Article One hereof. 

B. The United States will guarantee the payment to Belgium of the ordres de 
transport signed by American officers, which it contends are px'operly payable 
by Great Britain, provided neviertheless that the total amount guaranteed shall 
in no event exceed the sum of thirty thousand francs (30,000.00 frs.). 

C. The United States will re-pay to Belgium whatever sum it may be obliged 
to pay the French railroads for the supplies furnished to Belgian locomotives 
rented to the American forces, not exceeding in the aggregate the sum of 
twenty-five thousand francs (frs. 25,000.00), provided that a claim for the sum 
so expended is presented within six months from the date of this instrument. 

Article Six. For the considerations above named Belgium agrees to save 
the United States harmless from any and all claims of whatever nature against 
the United States or members of its military or naval forces on the part of any 
railway company within the limits of the Kingdom of Belgium, whether such 
railway company is the property of the Belgian Government or not; and also 
against all claims on the part of any person or corporation furnishing services 
to the American Army at Antwerp under the authority of the Ministre des 
Chemins de Fer, Marine, Postes et Telegraphes. 

Aeticle Seven. Belgium further agrees to furnish to the military and naval 
forces of the United States during the term of three years from the date of 
these presents, railway transportation in Belgium for persons and property at 
rates not exceeding those which may at the time be In force for the trans- 
portation of persons and property of the Belgian Army. 

Article Eight. Any sums of money which may be payable by the United 
States to Belgium by reason of items B and C of Article Five hereof may at 
the option of the United States be paid in cash or by the cancellation of an 
equivalent amount of principal of the obligations mentioned in Article One 
hereof. 

Article Nine. Whereas Belgium contends that all debts contracted by her 
up to November eleventh, A. D. one thousand nine hundred and eighteen, are 
on the same footing as loans, as far as concerns the application of article two 
hundred and thirty-two of the treaty of peace between the Allied and Asso- 
ciated Powers and Germany concluded at Versailles, and of a letter of six- 
teenth June, A. D. one thousand nine hundred and nineteen, from Messrs. 
Clemenceau, Woodrow Wilson, and Lloyd-George to M. Hymans, minister of 
foreign affairs of Belgium. 

It is understood and agreed that the total debts of Belgium contracted for 
services and materials furnished up to November eleventh, A. D. one thousand 
nine hundred and eighteen, which ai*e included in this settlement amount to 
four million five hundred and seventy-five thousand one hundred and thirty- 
three francs fifty centimes (frs. 4,575,133.50) and that nothing herein contained 
shall prejudice any action that the Government of the United States may take 
under or by virtue of said treaty and letter. 

In witness whereof on the day and year first above written this instrument 
has been executed in four duplicate originals by the United States of America 
through the chairman of the United States Liquidation Commission — War De- 
partment, and by the Government of the Kingdom of Belgium through the 
minister of finance. 

(Signed) Leon Delacy, 

Ministre des Finances. 
Edwin B. Parker, 
Chairman, United States Liquidation Commission — War Department. 

Signed by both parties in presence of Frederic Gilbert Bauer, Lieut. Col., J. A. 



UNITED STATES LIQUIDATION COMMISSION. 



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122 UNITED STATES LIQUIDATION COMMISSION". 

The balance due the U. S. is $27, 094, 195. 22 

And francs 373,465.42 at 5.45 as per bill of sale 68, 525. 71 

Total 27, 162, 720. 93 

For which Belgium in final contract of November 7, 1919, fur- 
nishes treasury bills or notes — 

Applying on sales contract of Mar. 1, 1919 18, 574, 139. 79 

Applying on sales contract of Aug. 5, 1919 8, 392, 097. 57 

Applying on sales contract of Aug. 21, 1919 196, 483. 57 

27, 162, 720. 93 
An item of £1,160.00 for transportation of Belgian personnel from England 
to France on American vessels is not included hereon. The Belgians have 
accepted this account and order for its payment by draft on London in pounds 
sterling has been issued, but through delay on part of Belgian treasury de- 
partment draft has not yet been delivered. It will be delivered in Brussels 
this week. [Delivered. See cable 1337, Noble to Parker, par. 3.] 

The undersigned have examined the foregoing account on the part of the 
U. S. Liquidation Commission — War Department and the Government of the 
Kingdom of Belgium and find same to be correct both as to debits and credits. 
For the U. S. Liquidation Commission — War Department: 

(Signed) Frederic Gilbert Bauer, 

Lieut. Col., Chief Finance Officer. 
For the Government of the Kingdom of Belgium: 

(Signed) N. Warn ant, Capitaine. 



APPENDIX XVI. 

(1) Contract Between United States of America and Owen Clegg, James 
Todd, Lt. Col. George W. Parkinson, Arthur Huntley Walker, Soci^Tf; 
Anonyme Darracq, a. Darracq & Company (1905) Ltd., Clement Talbot, 
Ltd., October 1, 1919. 

This contract entered into this first day of October, A. D. 1919, by and be- 
tween the United States of America (hereinafter called America), acting 
through the United States Liquidation Commission — War Department, of the 
one part, and Owen Clegg, James Todd, Lt. Col. George W. Parkinson, Arthur 
Huntley Walker, Societe Anonyme Darracq, a corporation organized under the 
laws of France; A. Darracq & Company (1905) Ltd., a corporation organized 
under the laws of Great Britain, and Clement Talbot, Ltd., a corporation or- 
ganized under the laws of Great Britain (hereinafter called the purchasers), of 
the other part, witnesseth : 

That for the consideration hereinafter mentioned, the parties agree as fol- 
lows: 

Article One. Property and supplies sold. — America agrees to and does 
hereby sell to the purchasers without warranty of quantity, quality or condi- 
tion, and the purchasers agree to and do hereby purchase from America all of 
the surplus motor vehicles, motor property, immobile equipment, spare parts, 
supplies, oils, gasoline, kerosene, grease, carbide, drums, bidons, etc., of the 
American Forces in Germany substantially as listed on a schedule hereto at- 
tached as part hereof, the same consisting of an index summary and sheets 
numbered from 1 to 15 inclusive, marked " Exhibit A " hereto attached as part 
hereof (except the property described in subdivisions I) and c of Article Four 



UNITED STATES LIQUIDATION COMMISSION. 123 

hereof), together with all of the motor transport equipment located in Motor 
Reception Park No. 1 at Sinzig, Germany, in Motor Reception Park No. 3 at 
Coblenz-Neuendorf and Coblenz-Lutzel, Germany, and in Motor Reception Park 
No. 4 at Bitbiirg, Germany, whether the same is or is not listed on Exhibit A, 
and America will not, without the purchasers' consent, increase or decrease the 
amount of motor transport equipment contained in said motor reception parks 
on September 19, 1919. 

Article Two. Title. — Title to the supplies and property hereby sold shall pass 
to the purchasers upon the signing of this agreement. 

Aeticle Three. Purchase price and terms of payment. — The purchase price 
shall be three million two hundred and fifty thousand pounds sterling 
(£3,250,000), payable in the following installments on the following dates: 

October 1, 1919. Twenty thousand pounds £20,000 

October 11, 1919. One hundred thousand pounds 100, 000 

November 1, 1919. Two hundred five thousand pounds 205, 000 

December 1, 1919. Two hundred fifty thousand pounds 250, 000 

January 1, 1920. Six hundred sixty-eight thousand seven hundred 

fifty pounds 668, 750 

February 1, 1920. Six hundred sixty-eight thousand seven hundred 

fifty pounds 668, 750 

March 1, 1920. Six hundred sixty-eight thousand seven hundred fifty 

pounds 668, 750 

April 1, 1920. Six hundred sixty-eight thousand seven hundred fifty 

pounds 668, 750 

3, 250, 000 

The first payment of twenty thousand pounds (£20,000) has been made and 
America acknowledges the receipt thereof. All payments after the first pay- 
ment of twenty thousand pounds (£20,000) shall be made to the chief quarter- 
master of the American forces in Germany, now stationed at Coblenz, through 
the general sales agent, American forces in Germany, or, at the election of the 
War Department of America, at such bank or trust company in London, Eng- 
land, or Paris, France, as the said War Department may designate. 

Article Four. Shortages or excesses of property or supplies sold. — A check 
shall be made by the representatives of the parties before November 7th, 1919, 
of the property and supplies hereby sold. 

In the event that such check should disclose that there are substantially 
lesser or greater quantities of any of the property and materials sold than 
the quantities thereof listed in Exhibit A, the "prices" of the property or 
materials short and of the property and materials in excess shall be deter- 
mined in the following manner, and the net difference between the total 
" prices " gf all of the property or material short and the total " prices " of 
all of the property or materials in excess shall be deducted from the purchase 
price provided in Article Three, if such net difference discloses a net shortage 
and shall be added thereto if such net difEerence shows a net excess. 

(a) The "prices" of the property or materials described in Exhibit A, and 
of similar property and materials, are agreed to be (but solely for the purposes 
of this article and for the purposes of subdivision (d) of Article Five hereof) 
the following: 

Of the motor vehicles and equipment listed at pages 1 to 12, inclusive, of 
Exhibit A the "price" of each unit is 35^ per centum of the unit resulting 
value thereof, as set forth in Exhibit A, ascertained as to each article by 
dividing the " resulting value " of such articles by the number thereof, as 
shown on said pages of said Exhibit A. Provided, however, that the value 



124 UNITED STATES LIQUIDATION COMMISSION. 

of the E and F class vehicles referred to in subdivision (&) of this Article 
shall be ascertained and credited as provided in said subdivision. 

Of the gasoline, oil, etc., listed on page 15 of Exhibit A, the " price " of each 
unit is the unit cost thereof as set forth on said page of said Exhibit A. 

Of the immobile equipment and hand tools in M. T. C. Overhaul Park, 
Coblenz, Germany, and of the spare parts in spare parts depot, Coblenz, Ger- 
many, listed oh pages 13 and 14 of said Exhibit A, the " price " of each unit 
is the unit resulting value thereof ascertained as hereinbefore provided, from 
inventories which the general sales agent, American forces in Germany, has 
on hand and will submit to the purchasers. 

Of the solid tires, casings, tubes, rims, and tire carriers in spare-parts 
depot, Coblenz, Germany, listed on page 14 of Exhibit A, the " price " of each 
unit is the unit resulting value thereof, ascertained as hereinbefore provided, 
from the " resulting values " and " numbers " set forth on said page 14 of 
Exhibit A. 

(b) There are excepted from this sale such E and F class vehicles listed on 
Exhibit A as America may require for repair of vehicles now in use by the 
American forces in Germany, and shall have removed from said motor re- 
ception parks before October 5, 1919, and the purchasers shall be credited on 
account of the purchase price provided in Article Three hereof an amount equal 
to 35^ per centum of the imit resulting value of said E and F vehicles so 
excepted, as shown in said Exhibit A, multiplied by the number of imits 
thereof. 

(c) There are also excepted from this sale the seven 25-kilowatt generator 
sets installed in the shop at Coblenz-Lutzel, and the purchasers shall be 
credited therefor on account of the purchase price provided in Article Three 
hereof an amount equal to the full unit resulting value thereof, multiplied 
by the number of units thereof; but the purchasers shall have the right to 
use these generator sets in connection with the operation of the I'epair shop 
for such time as they desire, but not beyond the time that the American 
forces in Germany remain in military possession of said repair shops. 

(ri) The amounts to be credited or debited, as provided In this article, on 
account of the purchase price provided in Article Three, shall be credited or deb- 
ited, as the case may be, on account of the last instalment of said purchase price. 

(e) On or before November 7, 1919, the adjustment of the purchase price 
provded by this article shall be made on behalf of the purchasers by said 
Lt. Col. George W. Parkinson, or such other person as the purchasers shall 
designate in writing, and, on belialf of America, by the general sales agent, 
American forces in Germany, and a written statement of the result of said ad- 
justment in six duplicate originals signed by them, shall, on or before said 
date, be made, and one copy thereof shall be annexed to each copy of this con- 
tract as part thereof, and shall have the same force and effect as though the 
same had been executed by the parties hereto as part hereof. 

Article Five. Security. — As security for the performance by the purchasers 
of their obligations under this agreement they have redelivered to America, 
which acknowledged the receipt thereof, all of the property and supplies hereby 
sold to them, to have and to hold the same in pledge in accordance with the 
following terms and conditions : 

(a) America shall hold said property, at the sole risk of the purchasers, and 
after November 1, 1919, will be obligated only to furnish such guards, for a 
period of not exceeding one year from October 1, 1919, as may be necessary 
in the judgment of the commanding general, American forces in Germany, to 
give military protection thereto. The expenses of America for the use of the 
land and buildings on or in which said property, after November 1, 1919, shall 



UNITED STATES LIQUIDATION COMMISSION. 125 

be situated, shall be paid by the purchasers. If after November 1, 1920, any 
of the property hereby sold shall remain in the possession of America, America 
may remove and store the same for, in the name of, and for the account and 
at the risk of the purchasers, and the cost of said removal shall be repaid by 
the purchasers to America and shall constitute a lien on said property, and 
the cost of the storage thereof sball constitute a lien thereon in favor of the 
person, firm, or corporation undertaking the storage thereof. 

(b) In the event of default by the purchasers in the payment of the instal- 
ments of the purchase price amounting to three hundred and five thousand 
pounds (£305,000) payable October 11th and November 1, 1919, or in the pay- 
ment of the instalment of the purchase price amounting to two hundred and 
fifty thousand pounds (£2.50,000) payable December 1, 1919, America may, after 
giving ten days' written notice thereof to the purchasers in the manner herein- 
after provided, without resort to judicial proceedings or otherwise, declare 
this agreement to be canceled, and thereupon, this agreement shall be canceled, 
and all of the property and supplies hereby sold by America to the purchasers 
shall revert to and become the absolute property of America, and the sums paid 
by the purchasers to America prior to such cancellations shall be retained by 
America as liquidated damages for breach of this contract, and the parties 
hereby agree that said sums, in said event, would fairly represent the amount 
of damages that would be sustained by America on account of said breach. 

(c) In the event of the default by the purchasers in the payment of any of 
the installments of the purchase price or in the payment of any other sums 
payable by the purchasers to America under this agreement, America may 
declare the entire unpaid balance of the purchase price, or any part thereof, 
immediately due and payable, and, thereupon, the same shall be due and pay- 
able, and America may, after giving ten days' written notice thereof to the 
purchasers in the manner hereinafter provided, without judicial proceedings of 
any kind, sell at public or private sale, in bulk or in installments, and from time 
to time, at such price or prices as America, in her sple discretion may deem to 
be reasonable under the circumstances, any or all of the property hereby 
pledged, and shall apply the net proceeds thereof after deducting the expenses 
of sale and delivery, to the payment of the amount due to America under this 
agreement, and shall pay over the balance thereof, if any, to the purchasers. 

If after any sale as aforesaid there then should remain unpaid any balance 
payable under this agreement by the purchasers to America, the purchasers 
shall, jointly and severally, be liable for the payment thereof to America, and 
if there then should remain in America's possession any of the property hereby 
pledged the same shall remain subject to the lien of said pledge and may be 
sold as hereinbefore provided and the proceeds applied as hereinbefore provided. 

(d) After the payment by the purchasers of the installments of twenty thou- 
sand pounds (£20,000) payable Ocober 1, 1919, and of the two installments of 
one hundred thousand pounds (£100,000) October 11th, 1919, and two hundred 
five thousand pounds (£205,000) November 1st, 1919, the purchasers may, from 
time to time, and upon paying to America additional amounts equal to the 
"prices" thereof ascertained as provided in subdivision (a) of Article Four 
hereof, and upon giving proper receipts therefor, take possession of any of the 
px'operty or supplies hereby pledged ; and the payments made as aforesaid shall 
be credited on account of the installments of the purchase price payable as pro- 
vided in Article Three (adjusted as provided in Article Four hereof) and there, 
upon said property and supplies so delivered shall be free from the lien of this 
pledge. 

When the aggregate amount of all of the sums paid by the purchasers to 
America, under this agreement, shall equal the entire amount payable by the 



126 UNITED STATES LIQUIDATION COMMISSION. 

purchasers to America thereunder, all of the remaining property and supplies 
hereby sold shall be released from the lien of this pledge and shall be forthwith 
delivered to the purchasers. 

Abticle Six. Miscellaneous provisions. — The purchasers may from time to 
time repair and improve motor vehicles and- equipment in the Overhaul Park, 
Coblenz, Germany, sold under this agreement. 

Article Seven. The obligations of the purchasers under this agreement shall 
be joint and several. 

Article Eight. This contract shall be interpreted in accordance with the laws 
of America as the same prevail in the District of Columbia. 

Article Nine. The purchasers designate their office in Coblenz or Coblenz- 
Lutzel as a place where America may deliver any written notice provided for by 
this agreement or otherwise, and it shall also constitute a delivery of any such 
notice when the same has been deposited in the German or French mails, 
registered, postage prepaid, in an envelope addressed to Soci^te Anonyme 
Darracq, at 33 Quai du General Gallieni, Surennes, France. 

Article Ten. The Quartermaster's Corps of the American forces in Germany 
shall sell to the personnel employed by the purchasers to handle the motor 
equipment, on orders signed by the purchasers or their authorized representa- 
tives, commissary food supplies at the prices charged therefor to civilian em- 
ployees of the American forces in Germany, provided said food supplies are used 
solely for the subsistence of said personnel and for no other purpose. 

Article Eleven. America will not permit within the area of Germany subject 
to its military control any tax or duty to be imposed or collected by Germany 
on account of the importation into Germany of any of the property or supplies 
hereby sold or on account of the exportation thereof by the purchasers from 
Germany. 

Article Twelve. The purchasers will not sell in France any of the property 
purchased without first procuring the consent in writing of M. Paul Morel, le 
Sous-Secretaire d'Etat aux Finances, or of some other authorized representative 
of the French Government. 

Article Thirteen. The commanding officer of the American forces in Ger- 
many will issue such passes or permits as may be necessary for the personnel 
employed by the purchasers to handle said motor equipment so that said per- 
sonnel and persons negotiating with the said purchasers can enter and leave the 
occupied territory without hindrance or delay at all times. 

Article Fourteen. So long as the American forces in Germany shall be 
entitled by requisition or lease to use the motor parks, grounds, and group of 
buildings known as the " Overhaul Park and Annex, Coblenz-Lutzel," but not 
longer than may be necessary for the purchasers to repair and ship the motor 
transport vehicles hereby sold, and in no event later than October 1, 1920, 
unless the commanding general, American forces, extend said period, the pur- 
chasers may use said grounds and buildings for the purpose of housing the per- 
sonnel necessary to handle said property or for other necessary purposes con- 
nected with the carrying out of this agreement. The cost to America for the 
use and occupation of said grounds and buildings, while used as aforesaid by 
the purchasers, shall be reimbursed to America by the purchasers. 

Article Fifteen. Each of the purchasers severally irrevocably constitutes and 
appoints the consul general and the vice consul of Great Britain at New York 
City, New York, and their successors, and each of them, his or its attorney in 
fact with full power for him or it and in the name, place, and stead of him or 
it, to receive or accept service of judicial process in any action, suit, or pro- 
ceeding which America may bring against him or it on account of this agree- 
ment, or for the enforcement of the obligations thereof. 



UNITED STATES LIQUIDATION COMMISSION. 127 

Article Sixteen. The general sales agent, American forces in Germany, or 
his successor, or such other person as the War Department of America may 
designate to the purchasers in writing, shall be the representative of America 
through whom shall be transmitted all reports, notices, or other communica- 
tions relating to this agreement which the purchasers may desire to deliver or 
communicate to America. 

In witness whereof, on the day and year first above written, this contract 
has been executed in six parts, each having the full force and effect of an 
original, by the United States of America, acting through the United States 
Liquidation Commission — War Department, Edwin B. Parker, chairman, of the 
one part; and by Owen Clegg; James Todd; Lt. Col. George W. Parkinson; 
Arthur Huntley Walker ; Societe Anonyme Darracq, acting through Owen Clegg, 
duly authorized thereto; A. Darracq & Company (1905), Ltd., acting through 
A. Huntley Walker and James Todd, duly authorized thereto ; and by Clement 
Talbot, Ltd., acting through A. Huntley Walker, duly authorized thereto, on 
the other part. 

United States of America, 
By Edwin B. Parker, 
Chairman, United States Liquidation Commission — War Department. 

Owen Clegg. 
James Todd. 

G. W. Parkinson, Lt. Col. 
Arthur Huntley Walker. 
SociliTfi Anonyme Darracq, 
By Owen Clegg, 

Managing Director. 
A. Darracq & Company (1905), Ltd., 
By A. Huntley Walker, James Todd. 

Clement Talbot, Ltd., 
By A. Huntley Walker. 
Witness as to Edwin B. Parker, Owen Clegg, James Todd, Lt. Col. George W. 
Parkinson, Arthur Huntley Walker. 

(Signed.) Edward T. Noble. 

(2) Contract Between United States of America and Owen Clegg et al.. 

Dated December 3, 1919, Supplementary to Contract Dated October 1, 

1919. 

Contract between United States of America and Owen Clegg et al., dated 
December 3, 1919, supplementary to contract dated October 1, 1919. 

Whereas, heretofore, to wit, on the 1st day of October, A. D. 1919, a contract 
(hereinafter called "Original contract") was entered into between the United 
States of America (therein and hereinafter designated "America") on the 
one part, and Owen Clegg and others (therein designated "Purchasers" and 
hereinafter, together with The Motor Organizations, Limited, designated " Pur- 
chasers ") on the other part, a copy of which said original contract (omitting the 
exhibits thereto) is hereunto attached and made a part hereof, marked for 
identification " Exhibit A " ; and 

Whereas, the said The Motor Organizations, Limited, a corporation incorpo- 
rated and existing under and by virtue of the laws of Great Britain, of which 
Sir Percival Perry, James Todd, and Col. B. J. H. Fitzgerald are directors, 
has acquired an interest in and assumed obligations arising under the said 
original contract; and 

Mniereas it has been found impracticable to complete the checking of the 
properties acquired by the purchasers under the terms of the said original con- 



128 UNITED STATES LIQUIDATION COMMISSION. 

tract and make the adjustments and state an account on or before November 7, 
1919, as stipulated for in Article Four of the original contract ; and 

Whereas the purchasers have made the payments stipulated for in Article 
Three of the said original contract, which payments so made aggregate in 
amount £325,000, leaving a balance due by the purchasers to America of 
£2,925.000 (subject to additions or deductions in accordance with the pro- 
visions of Article Four of the original contract) ; and 

Whereas the purchasers desire an extension of time and a readjustment of 
the dates of payment of such balance ; and 

Whereas Sir Percival Perry has assumed the active executive management 
of The IMotor Organizations, Limited, and as such is in charge of conditioning 
and marketing the property acquired by the purchasers under the terms of the 
said original contract: 

NoiD, therefore, in consideration of the premises and of the mutual under- 
takings herein mentioned, it is agreed between the parties hereto that the 
original contract shall be and it is hereby modified and amended in the follow- 
ing respects : 

Section 1. The Motor Organizations, Limited, joins herein for the pui'pose 
of assuming, and does in all things assume, jointly and severally with the 
other purchasers, the obligations and undertakings arising under the said 
original contract and this supplement thereto, without, however, in any wise 
or to any extent releasing or modifying the joint and several obligations of the 
purchasers named in the said original contract. 

Section 2. Sir Percival Perry joins herein for the purpose of agreeing, 
jointly and severally, with the other purchasers, and does hereby agree, jointly 
and severally, with the other purchasers, that so long as the purchase price, 
or any part of it, remains unpaid, he will (unless released from this obligation 
by America) be and remain the active and directing executive in control of 
and in active charge of the conditioning and marketing of the property 
acquired by the purchasers under the said original contract and any and all 
amendments thereto. 

Section 3. The time for checking the said property, making the adjust- 
ments and stating the account, as provided by Article Four of the said 
original contract, shall be extended, and is hereby extended from November 7, 
1919, to January 15, 1920. It is further agreed between the parties hereto 
that in making the said check, adjustments and statement of account America 
shall be represented by Lieutenant Colonel T. H. Kruttschnitt, and the 
purchasers shall be represented by Lieutenant Colonel G. W. Parkinson (or in 
the event of his inability or refusal to act, then by Sir Percival Perry) ; and in 
the event of their disagreement with respect to the classification or quantity of 
the equipment or supplies, or any other matter arising in connection with the 
said checking, adjustments, and the statement of an account, as' provided for in 
the said Article Four of the said original contract, then in such event the de- 
cision of Lieutenant Colonel T. H. Kruttschnitt shall be final. 

Section 4. The purchasers shall immediately on the signing of this contract 
deposit in the Guaranty Trust Co. of New York (Pai-is Branch) the sum of 
two hundred fifty thousand pounds (£250,000) in the name of Lieutenant 
Colonel T. H. Kruttschnitt, A. M. C, trustee, and the purchasers may draw 
upon said amount by checks countersigned by said trustee to defray the ex- 
penses of repairing, improving, and selling the property purchased under this 
contract; provided that at any time Lieutenant Colonel T. H. Kruttschnitt 
may require the purchasers to reinstate within ten days the original amount 
deposited if in his opinion or in the opinion of the War Department of the 
United States such reinstatement is necessary to the interests of the United 
States, and that upon ten days' written notice to the purchasers said trustee 



UNITED STATES LIQUIDATION COMMISSION. 129 

may withdraw the entire amount of £250,000 to the credit of the United States 
on account of the purchase price of this contract; provided, further, that on 
July 1, 1920, any remaining balance of the two hundred fifty thousand pounds 
will be applied upon the payment due on that date, as provided for in section 5. 
Section 5. The purchase price now i-emaininfr unpaid, namely, £2,925,000 
(subject to additions or deductions, in accordance with the provisions of Article 
Four of the original contract and the provisions of this supplemental contract), 
shall be paid in three equal installments, the first maturing July 1, 1920, the 
second maturing December 1, 1920, and the third maturing April 1, 1921. The 
purchasers jointly and severally agree to pay, on the entire balance of said 
purchase price remaining unpaid on April 1, 1920. interest from said date 
until paid at the rate of five per centum (5%) per annum: the provisions of 
the original contract with respect to the payment of the principal to govern also 
the payment of said interest. 

Section 6. Save as herein modified or amended, the said original contract 
shall be and it is hereby in all things continued in effect, ratified, confirmed, 
and reaffirmed. 

In witness whereof, on the day and year first above written, this contract 
has been executed in six parts, each having the full force and effect of an 
original, by the United States of America, acting through the United States 
Liquidation Commission — War Department. Edwin B. Parker, chairman, of 
the one part; and by Owen Clegg, James Todd, and George W. Parkin.son (lieu- 
tenant colonel); Arthur Huntley Walker; Societe Anonyme Darracq, acting 
through Owen Clegg, duly authorized tliereto; A Darracq & Company (1905), 
Ltd., acting through A. Huntlpy Walker and James Todd, duly authorized 
thereto; Clement Talbot, Ltd., acting through A. Huntley Walker, duly au- 
thorized thereto; by Sir Percival Perry individually, and by The Motor Or- 
ganizations. Limited, acting through James Todd and Sir Percival Perry, Colonel 
Brinsley John Hamilton Fitzgerald, duly authorized thereto, on the other part. 

United States of America, 
By Edwin B. Parker, 
Chairman, United States Liquidation Commission — ^Var Department. 
Owen Clegg. 
James Todd. 

G. W. Parkinson, Lt. Col. 
Arthur Huntley Walker. 
Societe Anonyme Darracq, 
By Owen Clegg, Managing Director. 

A. Darracq & Company (1905), Ltd., 
By A. Huntley Walker. 
James Todd. 
Clement Talbot, Ltd., 
By A. Huntley Walker. 
Percival Perry. 

The Motor Organizations, Limited, 
By .James Todd. 
Percival Perry. 

Col. Brinsley John Hamilton Fitzgerald. 
Witness as to Edwin B. Parker : 

Edward T. Noble. 
Witness as to all the signatures of G. W. Parkinson, A. Huntley Walker, Owen 
Clegg, and James Todd : 

.7. H. Watson, 150 Neir Bond St., Loudon, Secretary. 
183176—20 9 



130 



UNITED STATES LIQUIDATION COMMISSION. 



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UNITED STATES LIQUIDATION COMMISSION. 131 

APPENDIX XVIII. 

(1) Final Contract of Settlement. 
british artillery and artillery ammunition convention. dated august 

0, 1919. 

Agreement between the Government of His Britannic Majesty and the Govern- 
ment of the United States with respect to artillery and artillery ammunition. 

DEFINITIONS. 

The term " Great Britain," as used herein, shall be taken to mean the Gov- 
ernment of His Britannic Majesty. The term " United States," as used herein, 
shall be taken to mean the Government of the United States of America. The 
term " Artillery," as used herein, shall be taken to mean artillery of all natures 
and calibers, including components, equipment, and spare parts, unless otherwise 
specified. The term " ammunition," as used herein, shall be taken to mean artil- 
lery ammunition of all natures and calibers referred to in the agreement, in- 
cluding components, unless otherwise specified. 



From time to time, prior to October 19th, 1918, the United States placed 
orders with or entered into contracts with Great Britain, by which Great Britain 
agreed to manufacture, or caused to be manufactured and delivered to United 
States, certain artillery and ammunition of the natures and the calibers here- 
inafter mentioned. All such agreements were merged into and superseded by 
that certain agreement entered into between the United States and Great 
Britain on the 19th day of October, 1918, as evidenced by a letter from Edward 
R. Stettinius, special representative of the Secretary of War of the United 
States of America to the ministry of munitions of war. London, England, and 
the indorsement of acceptance thereon by Winston S. Churchill, minister of 
munitions, acting on behalf of His Britannic Majesty's Government, which 
letter and acceptance, together with Schedules I, II, and III, accompanying 
and forming a part thereof, are hereunto attached, made a part hereof, and 
marked for identification " Exhibit A." Schedules I and II thereof set forth the 
definitive orders placed under the aforesaid agreement. 

In due time the United States notified Great Britain that it would not exer- 
cise its option to purchase the artillery specified in Schedule III of the said 
letter of October 19, 1918. Following the signing of the armistice of November 
11, 1918, and on or about November 14, 191S, the United States notified Great 
Britain to suspend all further deliveries of artillery and ammunition provided 
for by the aforementioned contract of October 19, 1918. 

The parties hereto now desire, as far as practicable, to relieve the United 
States from its obligation to accept and pay for the artillery and ammunition, 
covered by the said contract of October 19, 1918, in so far as this can be accom- 
plished without loss to Great Britain, and so to readjust the calibers, types, 
and natures of said artillery and ammunition to be taken and paid for by the 
United States as will best meet its needs under changed conditions. 



132 



UNITED STATES LIQUIDATION COMMISSION. 
AGREEMENT. 



Now, therefore, in consideration of tlie facts as embraced in tlie foregoing 
recitals, and of tbe respective undertakings of tlie contracting Governments,- 
parties liereto, it is mutually agreed as follows : 

Article I. Great Britain will deliver to the United States, and the United 
States will take artillery and artillery ammunition as follows, and pay to Great 
Britain the cost thereof, to Great Britain being a total of £6,637,598. 

It is understood and agreed between the contracting parties that this amount, 
as set forth in detail below, represents as nearly as possible the cost of articles 
to be supplied under this agreement, without further discussion or determina- 
tion of prices. 



GUN EQUIPMENTS. 



Nature. 



8-inch howitzer, Mark VII 

8-ineh howitzer, Mark VI 

6-iiich gim, Mark XIX 

6-inch gim bodies complete with breech mechanisms 
60-pounder gun 



Cost per 
unit. 



£6,295 
6,390 
6,374 
2,060 
5,210 



Number 
of imits. 



84 
64 

100 
50 

200 



GUN AMMUNITION. 



8-inch high explosive 

6-inch gun high explosive. . 

Shrapnel 

60-pounder high explosive . 

Shrapnel 

High explosive 

Shrapnel 



Total 

Grand total. 



£13.10.0 
9. 15. 
10. 5.0 
6. 0.0 
6. 3.4 
5. 5.0 
5. 10. 



1 170, 000 
1 25,000 

1 25, 000 

2 33, 500 
2 33,500 
1 6b, 500 
1 66, 500 



Total 
value. 



£528, 780 
408, 960 
637, 400 
103, 000 

1,042,000 



2, 720, 140 



£2, 295, 000 
243, 750 
256, 250 
201,000 
206, 583 
349. 125 
365, 750 

3,917,458 
6, 637, 598 



Component. 



2 Complete rounds. 



Of the 200 60-pounder guns embraced in the foregoing schedule Great Britain 
may, at its election, furnish sixty (60) partly worn guns, in which event it 
will without further expense to the United States deliver with each partly 
worn gun a new tube for relining same. The said tubes shall be rough bored 
and furnished on the outside for shrinkage. 

The terra "complete rounds" as used in the foregoing schedule (and else- 
where in this contract) shall be taken to mean shells fully assembled, loaded 
(or filled), fuzed (or with fuzes packed separately, following the standard 
practice for safety in shipment and storage) and ready for use, together with 
the propellant and primer. The term " components " as used in the foregoing 
schedule (and elsewhere in this contract) shall be taken to mean that all of 
the parts of the shell shall be complete in themselves, ready for assembling 
and loading (or tilling) but unassembled, and the shells unloaded (or un- 
filled) ; the propellant and components of the explosive charges will be de- 
delivered in bulk in satisfactory containers, and the cartridge bags and primers, 
fuzes, and other components will be delivered separately. 

The condition of the artillery material to be delivered under this contract 
will be as follows : 

(a) Except as otherwise specified all material to be new or relined guns 
with no firing except the normal proof firing and carriages either new or 



UNITED STATES LIQUIDATION COMMISSION. 133 

repaired. The new and relined guns and the new and overhauled and repaired 
carriages will have gone through and passed the standard British inspection 
for material to be passed into service. 

(ft) 8" hoiv-itsef, Mark VII. — Approximately 30 of these will be new — that is, 
the guns will be new or relined, liaving been fired only the usual number of 
proof I'ounds. The carriages will be new or thoroughly overhauled and re- 
paired. The balance of these howitzers will have been fired a limited number 
of rounds, in no case more than 1,000, and it will be understood that no 
howitzers will be accepted which show more wear than the normal wear for 
1,000 full rounds. The carriages will be new or entirely overhauled and re- 
paired. 

(c) 8" howitzer, Mark VI. — These will all be what British term " new' ma- 
terial " — that is, guns either new or relined, fired only the usual number of proof 
rounds. Carriages either new or entirely overhauled and repaired. 

(d) 6" guns, Mark XIX. — Same remarks as for 8" howitzers, Mark VI. 

(e) 60-poitnder guns. — 140 of these guns and carriages will be new — that is, 
guns will be new or relined and fired only the usual number of proof rounds. 
Carriages either new or entirely overhauled and repaired. The additional 60 
60-pounder guns will be partly worn ; as many as possible will be less than 
50% worn. Carriages will either be new or entirely overhauled and repaired. 

Article II. Tlie United States agrees to deliver and Great Britain agrees to 
accept ninety thousand (90,000) complete rounds of 9.2" howitzer ammunition, 
lieretofore manufactured by Great Britain, now owned by the United States 
and in the hands of the American Expeditionary Forces, in France. 

Article III. In consideration for the undertaking on the part of the United 
States, set forth in Article II hereof, Great Britain agrees to deliver, and the 
United States agrees to accept in addition to the ammunition specified in 
Article I. 

(a) Fifty thousand (50,000) rounds (components) H. E. shells for 60-pounder 
guns. 

(b) Two hundred and sixty thousand (260,000) rounds (components) of 
shrapnel for 60-pounder guns. 

It is understood, however, that the figure of the 90,000 complete rounds of 
9.2" howitzer ammunition referred to in Article II is approximate only, and 
that the number may run somewhat more or less than 90,000 rounds. 

Akticle IV. The 67,000 complete rounds of artillery ammunition for 60- 
pounder guns referred to in Article I shall be delivered by Great \Britain at 
Calais, France, and shall there be placed by Great Britain free of charge to the 
United States upon vessels designated by the United States, the United States 
accepts responsibility for an accident or explosion occurring in the course of 
loading on the said designated vessels. 

The artillery units and remaining artillery ammunition referred to in Articles 
I and III shall be delivered by Great Britain at a port or ports to be agreed in 
Great Britain <with the exception of explosives, which shall be delivered at 
Liverpool, except 873 short tons of cordite, which shall be delivered free on 
rail at I'Assomption, Canada, and 402 short tons of nitrocellulose, which shall be 
delivered free on rail at Upton's Pit, Canada) and shall there be placed by 
the United States upon vessels designated by them. 

But if later the situation should arise that the United States have not 
sufficient personnel to carry out this work, the material shall be placed by 
Great Britain upon ships to be designated by the United States. 

During the period in which the United States has the necessary organization 
at the port of delivery, the United States shall bear all the costs of off-loading 



134 UNITED STATES LIQUIDATION COMMISSION. 

from railway trucks and loading on to the ship and during the period when 
Great Britain undertakes the loading of the ship, Great Britain in its turn shall 
bear these charges. 

From time of delivery in truck at the port or rail, as the case may be, the 
United States accepts responsibility for any* accident or explosion occurring 
from the said material. Great Britain accepts responsibility for any accident 
or explosion occurring from said material imtil it is delivered at the port or 
rail and, during the period, if any, when Great Britain undertakes the loading 
under par. 3 of this article until it is delivered into ships. 

The 90,000 complete rounds of 9.2" howitzer ammunition referred to in 
Article II shall be delivered by the United States to Great Britain on vessels 
at a port or ports of Great Britain to be agreed, and there unloaded from the 
vessels by Great Britain, and Great Britain accepts liability for any accident 
or explosion occurring in the course of unloading at the port of delivery. 

Article V. Each four of the artillery units referred to in Article I shall 
comprise the equipment and store prescribed for a battery of four pieces in 
the equipment lists annexed hereto, marked for identification, Exhibits " B," 
" C," " D," and " E." 

Article VI. Payment for the artillery and ammunition specified in Article 
I hereof shall be made as follows : Ninety per centum of the contract price 
thereof shall be payable to Great Britain upon the execution of this contract, 
payment of a bill for this proportionate amount having been authorized by the 
United States Liquidation Commission. War Department, as payment on ac- 
count and in advance of deliveries and five per centum thereof shall be pay- 
able upon the completion of deliveries of the ammunition and of the artillery, 
equipments, and stores specified in Exhibits " B," " C," " D," and " E," hereto 
annexed, except the stores described in these exhibits as " spares," and five per 
centum thereof upon completion of all deliveries due under Article I of the 
contract. 

Article VII. In addition to the normal equipment of these batteries, as 
specified in Article V, Great Britain agrees to deliver, and the United States 
agrees to accept and pay for the additional spare parts for these gun equip- 
ments shown on list hereto attached and marked for identification Exhibit " F." 

The United States agrees to pay to Great Britain (in addition to the total 
sum of £6,637,598 referred to in Article I), upon delivery of these additional 
spare parts, the unit prices as set forth on this list, which represent the cost 
of these articles without profit to Great Britain. Where prices are not specified 
in the list the prices to be paid shall be sums representing cost of the articles 
without profit to Great Britain. 

Article VIII. The obligations arising under this agreement shall completely 
and in all things supersede those arising under the aforementioned contract 
of October 19, 1918, and all other agreements heretofore made, binding the 
United States to accept from Great Britain and pay for artillery or artillery 
annnunition : Provided, hoiDcver, the United States shall not be relieved of its 
obligation to pay for all artillery components, spare parts and ammunition, 
heretofore delivered to it by Great Britain prior to November 14. 1918, or that 
were in the course of delivery on that date and were actually delivered prior 
to January 1st, 1919, and for which it has not yet paid. 

Abticle IX. Great Britain agrees and obligates itself (so long as it may 
continue to produce the same) at cost to It, to supply the United States with 
spare parts and materials or components required by the United States from 
time to time for the maintenance of the artillery delivered by Great Britain to, 
and paid by, the United States in pursuance of the terms hereof. 



UNITED STATES LIQUIDATION COMMISSION. 135 

Article IX. Great Britain agrees and obligates itself to supply the United 
States with two complete sets of prints, sufficiently translucent to have blue 
prints made therefrom, of all general and detailed drawings of the artillery and 
ammunition to be delivered hereunder, including drawings of all tools and ac- 
cessories, sights and accessory vehicles, to be delivered with the foregoing 
artillery and ammunition. 

The United States agrees and obligates itself not to publish the said prints 
and to treat as confidential any prints which are so marked. 

In witness whereof, the undersigned have subscribed these presents upon 
behalf of their respective Governments, as of this, the 9th day of August, 

A. D. 1919. 

(Sgd.) E. D. Bkicker, 

Colonel, Ordnance Department, for Chief of Ordnance, 

War Department, United States of America. 

(Sgd.) A. Watson, 

Representative of Minister of 

Munitions of Great Britain. 

Witness : 

(Sgd.) R. E. KiMBAUL, 

Lt. Col., Ord. Dept. 

United States Liquidation Commission, 
War Department. - 
(Sgd.) Edwin B. Parker, Chairman. 



Approved : 



(2) CovEiiiNG Letter on Artillery and Ammunition Settlement— Judge 

Parker to Mr. Latton. 

August 9, 1919. 
Sub.iect : Settlement of claim of Great Britain against the United States War 
Department for artillery and ammunition. 

Mr. W. T. Layton. 

Ministry of Munitions, London, England. 
My Dear Mr. Layton : In connection with the execution of the contract dated 
August 9th, signed by Mr. Watson representing Great Britain, and by Colonel 
Bri'cker representing the War Department of the United States, evidencing the 
full and complete settlement of all claims of Great Britain against the War 
Department of the United States, involving undertakings on the part of Great 
Britain to furnish to the United States War Department artillery and ammu- 
nition, it is understood : 

1. This contract as executed evidences a full, complete, unqualified, and 
unconditional settlement of the matters therein dealt with. 

2. It now develops, however, that Great Britain may not be able to furnish 
out' of stock all of the spare parts called for by the contract for some of the 
8-inch howitzers, not exceeding 61 in number, and Great Britain contends that, 
as the schedule of units to be delivered by Great Britain to the United States 
was changed at the request of, and for the benefit of the United States, Great 
Britain should not now be required to incur additional expense to manufacture 
these spare parts for the benefit of the United States; and you suggest that 
if the cost to Great Britain of producing the spare parts in question should 
exceed 50,000 pounds, such excess cost should be equally divided between Great 
Britain and the United States. 

3. In behalf of the United States I decline to commit the United States to 
pay any part of this possible excess cost, but agree that when the facts are 



136 UNITED STATES LIQUIDATION COMMISSION. 

fully developed, and you are in a position to advise to what extent, if at all, 
it is necessary for Great Britain to manufacture additional spare parts in 
order to comply with the contract, your proposition will then be further exam- 
ined and considered by the representatives of the United State.s, without com- 
mitment, however, to modify the contract in any particular. 

4. Without committing the United States to the recognition thereof, it is 
also understood that Great Britain is not foreclosed by this contract to pre- 
sent her claim, if any she has, for interest or for excess value, if any, of ma- 
terial obtained for the replacement of British material used in the manufac- 
ture of artillery and ammunition described in said contract. 
Yours very sincerely, 

(Sgd.) Edwin B. Parker, Chairriian. 

Mr. Laj'ton acknowledged the receipt of the above letter on August 13. 1919, 



APPENDIX XIX. 

Atjstrauan Wool Settlement. 
(Par. 6. Cuthell-Inverforth agreement of May 10, 1919.) 

The United States agrees to pay for the wool purchased from Great Britain 
under the contract of October 1, 1917, on the basis of the civil issue price, less 
two and one-half pence (2id.), in accordance with the bills already rendered, 
covering approximately 247,000 bales. The United States also agrees to pay 
the bills rendered by Great Britain for storage and insurance in Australia and 
for intei'est on delayed payments under this contract, amounting approximately 
to $850,000, and the United States agrees to waive all claims to a military 
rebate on the entire 247,000 bales or any portion thereof. 

The United States Government agrees to pay for the 115,000 bales already 
shipped under contract of November 7, 1918, on the basis of the civil issue price, 
less two and one-half pence (2M.), in accordance with the bills already ren- 
dered, and agrees to pay the one penny per pound premium- for selection, as 
set forth in the contract, waiving any question as to whether this selection was 
obtained. There shall be no claim for interest or storage made against the 
United States covering any of the wool undelivered under this contract by 
Great Britain. 

Great Britain agrees to cancel without cost to the United States all obligations 
on its part to take delivery of the undelivered portion of the wool covered by 
said contract of November 7, 1918, the total of which amounts approximately 
to 210,000 bales. The contract with regard to such 210.000 bales of wool is 
hereby agreed to be null and void. 



APPENDIX XX. 

Chatealt?oux Tank Plant Settlement (August 8, 1919). 

Agreement between the Government of His Britannic Majesty and the Govern- 
ment of the United States of America with respect to the Chateauroux tank 
project. 



UNITED STATES LIQUIDATION COMMISSION. 137 

DEFINITIONS. 

The term " Great Britain " as lierein used means tlie Government of His 
Britannic Majesty. Tlie term " United States " as herein used means tlie 
Government of the United States of America. The term " Chateauroux plant " 
as lierein used sliall be taken to mean the projected w^ork of construction to be 
undertaken in France pursuant to the contract between the United States and 
Great Britain, such contract being dated January 22, 1918, a copy of tlie same 
being hereto attached, marked Exhibit " A," and such term shall be deemed to 
include all matters and acts to be done or performed by either Government 
under such contract, other than the manufacture of components for tanks pro- 
vided for by subdivision 2 of paragraph 1 of the said contract, and the replace- 
ment of steel as provided for by paragraph 6 of said contract. 

RECITALS. 

By reason of the armistice the necessity for carrying out the contract between 
the parties dated January 22. 1918, Exhibit " A " having terminated and the 
work of erecting and equipping Chateauroux plant having, by mutual agreement, 
been discontinued, and there existing against the French Republic (hereinafter 
called France) an equitable claim on account of the allotment to it of 750 of 
the tanks allotted to Great Britain and 150 of the tanks allotted to the United 
States under said contract, and Prance having tentatively agreed to purchase 
fi'om Great Britain and the United States the Chateauroux plant and to pay 
therefor and in consideration of the aforesaid equitable claim the sum of twenty 
million francs, and the parties hereto desiring to adjust and settle their re- 
spective interests in said consideration and to liquidate, adjust, and settle the 
matters covered by said contract of .January 22, 1918, agree as follows : 

AGREEMENT. 

Article I. The expenditures of the parties incurred in carrying out said 
contract of January 22nd, 1918. other than these contracted for pursuant to sub- 
division 2, paragraph 1 thereof, shall be divided equally between the parties. 

Article II. The work of liquidation, including the sale of property and the 
settlement of all claims of contractors or third parties not already concluded, 
shall be conducted by Great Britain. To the end that the liquidation may 
be carried out to the best advantage, further expenditures may, if necessary, 
be authorized by Great Britain, materials may be accepted, indemnity under 
existing contracts and subcontracts paid, land purchased, and other acts deemed 
essential to the best interests of the respective Governments and the proper 
liquidation and preservation of the assets may be done and performed. 

Article III. An account shall be taken every six -months of all moneys paid 
out and expended by the respective Governments in pursuance of the contract, 
including settlements and indemnities paid in contemplation of the abandonment 
of the project, and each Government shall pay to the other whatever balance 
may be due from it as shown by such account ; provided, however, that ex- 
penditures made by either Government pursuant to the provisions of sub- 
division 2 of paragraph 1 of the contract shall not be included. It is further 
agreed that expenditures made by either Government pursuant to the provi- 
sions of subdivision 2 of paragraph 1 of the contracts are declared equal and 
are set off, the one against the other. Each Government shall retain title to 
all material manufactured by it pursuant to the provisions of subdivision 2 



138 UISriTED STATES LIQUIDATION COMMISSION". 

of paragraph 1 of said contract, and neither Government shall make any claim 
for reimbursement on account of expenditures made by it pursuant to the 
provisions of subdivisions 2 of paragraph 1, nor are such expenditures to be in 
any manner taken into. account in settling the obligations of the parties pur- 
suant to this agreement. 

Article IV. The commission created by the agreement of January 22nd, 
1918, consisting of Lieutenant Colonel A. G. Stern, Q. M. C, and Major .T. A. 
Drain, U. S. R., is hereby dissolved. 

Article V. The obligations devolving upon the United States by virtue of 
paragraph 6 of the contract of January 22, 1918, are hereby discharged, and 
the rights created thereby in favor of Great Britain are waived and relifi- 
quished by the Government of Great Britain. 

Article VI. The factory built pursuant to said contract of January 22, 1918, 
shall be sold to France pursuant to the agreement heretofore tentatively agreed 
upon whereby France is to pay as the purchase price thereof and in considera- 
tion of the equitable claim heretofore referred to the sum of twenty million 
francs, and said sum shall .be divided between the parties hereto in the pro- 
portion of seventy per centum thereof to Great Britain and thirty per centum 
thereof to the United States. 

In witness whereof the undersigned have subscribed these presents on behalf 
of their respective Governments as of the 8th day of August, nineteen hundred 
and nineteen. 

(Signed) A. Watson, 

Representative of the Minister of Supplies of His Britannic Majesty. 

Edwin B. Parker, 
Chairman of the United States Liquidation Commission, 

War Department of the United States Government. 



APPENDIX XXI. 

(1) Final Contract of Settlement of the Chateauroux Tank Project 

(Oct. 4, 1919). 

Agreement between His Britannic Majesty's Government and the United 
States of America in final settlement of the Chateauroux tank project. 

This agreement is supplemental to the agreement dated August 8, 1919, 
signed by A. Watson on behalf of His Britannic Majesty's Government and 
Edwin B. Parker on behalf of the United States of America, and supersedes 
the same in so far as anything herein contained may be inconsistent therewith. 

In consideration of the mutual agreements herein contained, it is agreed as 
follows : 

Article I. Promptly upon receipt of the twenty million francs (frs. 20,000,- 
000) mentioned in Article VI of said agreement of August 8, 1919, above de- 
scribed, Great Britain or the Anglo-American Commission, as the case may be, 
shall pay six million francs (frs. 6,000,000) thereof to the United States. 
Against receipt of said six million francs (frs. 6,000,000) the United States 
shall pay the ministry of munitions of His Britannic Majesty's Government the 
sum of fifty-four thousand and ninety-five pounds sterling (£54,095). Such 
payment by the United States shall be full performance of Article I of said 
agreement of August 8, 1919, and together with such payment by Great 
Britain shall constitute a full and final settlement of the affairs of the Anglo- 
American Commission and of the Chateauroux tank project and of all interest 



UNITED STATES LIQUIDATION COMMISSION. 139 

and liability of every nature of the United States in respect thereto, except as 
to the item " hidden loss on steel " hereinafter mentionetl. 

Article II. It is agreed that the statement designated " Schedule I " hereto 
attached and made a part hereof, together with all items and amounts therein 
contained except said item " hidden loss on steel." shall be considered a final 
and conclusive statement of the affairs of the Anglo-American Commission. 

Abticle III. Neither Government shall present against the other any further 
claim in respect to the above described tank project except " hidden loss on 
steel " as hereafter provided. In the event that upon liquidation, by the Anglo- 
American Commission, or by Great Britain, of any further assets which accrue 
to Great Britain, a sum is I'ealized in excess of any estimate contained in said 
Schedule I, such excess shall be retained by Great Britain. All liabilities of 
said Anglo-American Commission, or of Great Britain, in respect to said tank 
pro.iect, whether as set forth in Schedule I, or in excess of, or apart from, 
any liability therein stated, shall be borne by Great Britain without any re- 
course whatever against the United States. The United States shall retain 
without accountability to Great Britain any sum hereafter realized by it upon 
any assets or claim within its control, and shall not present any further claim 
against the Anglo-American Commission. 

Article IV. Great Britain has presented a claim against the Anglo-American 
Commission covering " hidden loss on steel," which is referred to in said 
Schedule I hereof. It is agreed that this item shall be omitted from the final 
settlement provided in this agreement and shall be included in the claim which 
Great Britain is making against the United States for " excess costs " of steel, 
and shall be settled on the same basis as said excess costs claim, excepting that 
Great Britain shall be entitled to receive from the United States only fifty per 
cent (50%) of the amount, if any, of "hidden loss on steel" as it may be 
determined in respect to the steel which has been supplied by Great Britain to 
the Anglo-American Commission. The United States does not, either directly 
or inferentially, admit by tlie execution of this agreement any liability in 
respect to said item " hidden loss on steel " as contained in the claim presented 
by Great Britain. 

Article V. This agreement shall be void and of no effect, and said agreement 
of August 8, 1919, above referred to, shall remain in full force and effect, in the 
event that the twenty million francs (frs. 20,000,000) mentioned in Article VI 
of said agreement of August 8, 3919, and referred to in Article I hereof, is not 
paid as in said Article VI pi-ovided. 

In witness whereof this agreement has been executed in four parts, each 
having the full force and effect of the original, by His Britannic Majesty's Gov- 
ernment acting through F. W. Phillips, on behalf of the ministry of munitions, 
and by the United States of America, acting through the Liquidation Com- 
mission — War Department, Edwin B. Parker, chairman, this fourth day of 
October, 1919. 

His Britannic Majesty's Government, 
By F. W. Phillips, 

On Behalf of the Ministry of Munitions. 
United States of America, 
By Edwin B. Parker, 

Chairman of the United States 
Liquidation Commission — War Department. 



140 



UNITED STATES LIQUIDATION COMMISSION. 



Schedule I. — Anglo-Americmi Commission {tanks), cost of factory and general 

expenses. 



PAYMENTS, JULY 31, 1919. 

Cash payments to date : Francs. 

Factory construction 15, 611> 584. 04 

Factory operation, etc 2, 690, 831. 02 

General administration 809, 807. 35 

Liquidation expenses 201, 726. 00 

Cancellation of orders 8,072.80 



Estimated further cash payments : 
To contractors — 

Balance of commission and pending 
claims in England, say £20,000, @ 32 

to 1 

Sundries — 

Balance payable for material supplied 
through Great Britain (M. of M.) and 
cancellation of orders, less credits, say 

£4,000, @ 32 to 1 

Liquidation expenses, London office, say 

£1,000, @ 32 to 1 

Miscellaneous bills and claims in France, 
say 

Due to British ministry of munitions: 
Hidden loss on steel.^ 

Freight on construction material 

Interest on advances calculated to May 31st, 
1919 



Francs. 
19, 322, 021. 21 



640, 000. 00 



128, 000. 00 

32, 000. 00 

350, 000. 00 

£48, 094 
25, 190 



510, 000. 00 



Due to U. S. A. : 

Francs. 

Power plant, Chateauroux 686,757.26 

Track, Neuvy-Pailloux 593, 296. 96 

Sundries supplied to A. A. C 166, 928. 84 

1, 446, 983. 06 
Less sundries supplied by A. A. C 111,967.37 



73, 284 ] 
, 32 to 1 I 2, 345, 088. 00 



1, 335, 015. 69 



24, 152, 124. 90 



' Not included in this statement, as the United States does not admit it as claimed. 
This item is to be taken up in the British " excess cost " claim, as provided in the agree- 
ment covering this settlement and is to be borne by the United States and Great Britain 
in equal shares, to the amount, if any, allowed upon the determination of the " excess 
costs " claim. 



ITNITED STATES LIQUIDATION COMMISSIOIT. 141 

U. S. LIQUIDATION. 

Francs. 
Half loss as above 11,781,024.93 

Less — 

Payment to Great Britain £300,000 on May Francs. 

12, 1919, @ 29.05 8,715,000.00 

Material supplied by U. S. A 1, 335, 015. 69 

10, 050, 015. 69 



Balance due to Great Britain 1, 731, 009. 24 

Balance due to Great Britain in sterling, @ 32 to 1 £54, 095. 00 

RECEIPTS, .JULY 31, 1919. 

Cash receipts to date: 

Interest from banks 9, 293. 40 

Realization of assets 180, 281. 65 

189, 575. 05 

Estimated further cash receipts : 

Interest from banks, say 500. 00 

Realization of assets (sale of miscellaneous 
material in C. S. D. stores in England), 
say £12,500, @ 32 to 1 400,000.00 

400, 500. 00 

Approximate net cost : 

U. S. A., 50% equals . 11, 781, 024. 93 

British, 50% equals 11,781,024.92 

23, 5G2, 049. 85 

24, 152, 124. 90 

GREAT BRITAIN LIQUIDATION. 

Half loss as above 11,781,024.92 

Payments to July 31st, 1919 (less receipts) 19,132,446.16 

Estimated further payments (less receipts) 749, 500. 00 

Freight and interest 2,345,088.00 

22, 227, 034. 16 

Less £300,000 from U. S. A 8, 715, 000. 00 

— ■■ 13, 512, 034. 16 

Balance due from U. S. A 1,731,009.24 

Certified correct : 

' P. W. Phillips, FifMncial Liquidator. 

<2) Tripartite Memorandum in Settlement of the Chateauboux Tank 

Pro.tect (Oct. 9, 1919). 

Ministeke De La Reconstitution Industrielle : 

At the request of the Inter-Allied Committee at Versailles the Governments 
of Great Britain and of the United States of America undertook, in 1918, the 
manufacture of Ajiglo-American tanks known under the name of " Liberty," the 
component parts of which were furnished by the said Governments and were to 



142 UNITED STATES LIQUIDATION COMMISSION. 

be assembled in France in a plant constructed by these Governments at Neuvy- 
Pailloux, near Chateauroux. 

Subsequent to negotiations, which arose after the armistice between the 
Ministere de la Reconstitution Industrielle, Monsieur Loucheur, representing 
France ; Mr. W. Layton, delegate of the British Minister of Munitions, repre- 
senting the British Government; and Mr. Edwin B. Parker, chairman of the 
Liquidation Commission, representing the Government of the United States of 
America, the liquidation of the expenses in connection with the manufacture 
of " Liberty " tanks was settled as follows, subject to the subsequent ratification 
by the French Chambers of the credit demanded with this in view : 

On the 170 millions, which represent the total of the expenses incurred by 
the Governments of Great Britain and of the United Sates, for the manufacture 
of these tanks, the French Government agrees to the sum of 20 millions. 
Furthermore, it is stipulated that the French Government will relieve the Gov- 
ernments of Great Britain and the United States of all payments and obliga- 
tions resulting from the purchase, occupation, and use of the land connected with 
the construction of the Neuvy-Pailloux plant. 

On the other hand, the Governments of Great Britain and of the United 
States give to the French Government in full ownership the buildings and rail- 
way tracks built at Neuvy-Pailloux, as well as all the material of all kinds 
which are in the plant and the surrounding land. 

The credits necessary to the execution of this agreement having been granted 
by the finance law of September 30th, 1919, the above agreement becomes 
definite. 

The Sous Secretaire d'Etat de I'Administration de la Guerre will decide on 
the way in which the sum of 20 millions, mentioned above, will be paid. 

Paris, October 9, 1919. 

( Signed ) Loucheur. Labkami. 

; Morel. C. C. Bakeie. 

Edwin B. Parker. F. W. Phillips. 



APPENDIX XXII. 

Extract from Cuthell-Inverforth Agreement of May 10, 1919. 

3. liberty motors and proper proportion of sets of spare parts. 

The Bureau of Aircraft Production of the War Department of the United 
States of America shall deliver a number of Liberty motors which, together 
with the Liberty motors delivered to date, shall equal 2,252. Such delivery shall 
be at the option of the United States, either at seaport in the United States, or 
from stocks of the American Expeditionary Forces in France. It shall render 
a bill for the sum of $16,589,718.90. Against this bill there shall be credited 
cash payments made to date of $2,625,000, leaving a balance due of $13,964,- 
718.90. Such bill shall be accompanied by a short statement to the effect that 
for the pnrposp of the settlement of this bill the total cost (excluding strictly 
military charges) of materials, plant, tools, and all other elements, is fixed 
at $153,515,619. The United States has made an allowance of $2,700,000 on 
account of labor expenditures subsequent to the armistice. The balance charge- 
able to Liberty motor construction for the purposes of fixing the costs of 
Liberty motors to Great Britain is fixed at $150,815,619. It is also agreed 
that the total production of Liberty motors for the purpose of the settlement 
between the parties hereto is 20,478. Great Britain has purchased and will take 



UNITED STATES LIQUIDATION COMMISSION. 143 

a number of motors equal to eleven per cent (11%) of the total production, or 
2,252. Great Britain shall also pay eleven per cent (11%) of all cost of such 
production, or $16,589,718.90. The United States shall, with each motor and 
with each group of motors, ship the same proportionate number of sets of 
spares which it shipped under the contract for 980 motors, dated July 11, 1918. 



APPENDIX XXIII. 

Agkeement in Settlement of the British Interest Claim 
(Oct. 20, 1919). 

Agreement between His Britannic Majesty's Government and the United 
States of America with respect to interest charges. 

DEFINITIONS. 

The term " Great Britain " as herein used means His Britannic Majesty's 
Government. The term "United States" as herein used means the Govern- 
ment of the United States of America. The term " War " as herein used 
means the war between the United States and the nations associated with it 
on the one part and the Imperial German Government and its allies on the 
other part. 

RECITALS. 

In connection with the prosecution of the war and matters arising there- 
from. Great Britain has invested or otherwise disbursed large sums of money 
which are properly chargeable against the United States. Great Britain has 
felt that some reimbursement to it should be made by the United States be- 
cause of the considerable periods of time elapsing between the dates of such 
investments or disbursements and the times of reimbursement thereof to Great 
Britain by the United States, and has put forward a claim for interest on 
all proper bills rendered by it against the United States. The United States 
has made similar investments and disbursements which are properly charge- 
able against Great Britain and has presented a claim for interest on bills 
rendered by it similar to any interest on bills rendered by Great Britain. 

The parties hereto desire to settle and adjust all claims between the War 
Department of the United States and Great Britain, or their respective agencies 
or representatives, for interest, or other compensation on account of delay, 
or lapse of time, in the rendering or in the payment of bills, statements or 
invoices, or delay, or lapse of time, in the reimbursement of capital expendi- 
tures, connected with the prosecution of the war. 

Now, therefore, it is agreed : 

Article I. For the purposes of this agreement and the settlement of the 
claims intended to be settled and adjusted hereby, and for no other purpose, 
the statement designated " Schedule I," hereto attached and made a part 
hereof, together with all items and amounts therein contained, shall be a final 
and conclusive statement of each and every matter referred to therein. 

Article II. The United States shall pay to Great Britain the sum of seven 
hundred and ninety-seven thousand eight hundred and fifty-four pounds eleven 
shillings and twopence (£797,854 lis. 2d.) set forth in said Schedule I, being the 
interest computed at the rate of five per cent (5%) per annum for a period of 
3| months upon the net balance between the aggregate amounts, respectively, of 
all bills of every nature rendered in the United States, Great Britain, France, or 
elsewhere, by each of said Governments against the other, prior to August 1, 



144 UNITED STATES LIQUIDATION COMMISSION. 

1919, iu respect to transactions arising out of, connected witli, or incident 
to the prosecution of tlae war, except (1) the ti'ansfer to the United States 
of certain property acquired by Great Britain from the Westinghouse Electric 
and Manufactui-ing Company ; (2) matters (particularly ocean transportation 
of cargo and troops) within the jurisdiction of the ministry of shipping of 
Great Britain, other than such matters as may be covered by an item or 
items of said Schedule I; (3) matters more particularly within the purview 
of other departments of the United States other than the War Department, 
including all loans from the United States to Great Britain; and (4) obli- 
gations between the United States and the Dominion of Canada. This agree- 
ment shall not be interpreted to prejudice or affect in any way whatsoever 
any of the matters referred to in the four above-mentioned exceptions, either 
as to a settlement of any of them, or of interest in respect to any of them, 
or otherwise. 

Article III. Great Britain does hereby release and discharge the United 
States — and the United States does hereby release and discharge Great Britain — 
from all obligations, commitments, claims, or demands whatsoever which Great 
Britain has against the United States or the United States has against Great 
Britain, as the case may be, or which either may hereafter have, in respect to 
interest upon bills, statements, or invoices, compensation for delays in rendering 
or in paying the same, reimbursement of costs incurred by reason of such delays, 
or compensation for the use of money or credits or for capital expenditures ; in 
any wise pertaining to transactions arising out of, connected with, or incident to 
the prosecution of the war, and covered by bills rendered prior to August 1, 
]919, irrespective of whether stated or referred to in said Schedule I; except 
the matters designated (1), (2), (3), and (4) herein above in Article II hereof 
referred to. 

Article IV. On all proper bills referred to in said Schedule I which are still 
outstanding on October 1, 1919, interest shall accrue at the rate of five per cent 
(5%) per annum from October 1, 1919. In respect to all proper bills connected 
with the prosecution of the war, other than those pertaining to the above-men- 
tioned matters, designated (1), (2), (3), and (4) in Article II hereof, rendered 
on or after August 1, 1919, each Government shall compute the amount thereof 
outstanding at the end of each calendar month, and all such bills then out- 
standing which were rendered prior to the first of said calendar month, except 
bills concerning which some other arrangement has been made in respect to 
interest or in lieu thereof, shall bear interest from the first day of the succeed- 
ing calendar month until payment of such bill, at the rate of five per cent (5%) 
per annum. Accrued interest shall not be added to the amount of any bill so 
as to result in the compounding of interest in any manner. The payment of 
interest as herein provided shall be full satisfaction of all claims and demands 
whatsoever for interest upon bills, statements, or invoices, or compensation 
for delays in rendering or in paying the same, or reimbursement of costs in- 
curred by reason of such delays, or compensation for the use of money or credits 
or for capital expenditures, in any wise pertaining to the transaction for which 
the bills, upon which such interest has been paid, shall have been rendered. 
No bill shall be considered as a proper bill hereunder until rendered in finally 
correct form. 

In witness whereof this agreement has been executed in four parts, each 
having the full force and effect of an original, by His Britannic Majesty's 
Government, acting through A. Watson, representative of the minister of 
munitions, and by the United States of America, acting through the Liquidation 



UNITED STATES LIQUIDATION COMMISSION. 



145 



Commission, War Department, Edwin B. Parker, chairman, this twentieth day 
of October, 1919. 
Witness : 

RuFus J. Teimble. 

His Britannic Majesty's Government, 
By A. Watson, 

Representative of the Minister of Munitions. 
Witness : 

RuFUS J. Trimble. 

United States of America, 
By Edwin B. Parker, 
Chairman of the United States Liquidation Commission — War Department. 

Schedule I. — Interest statement — Summary of tills rendered prior to 

July 31, 1919. 





Amount. 




Pounds. 


Dollars. 


Francs. 


•Great Britain: 

Departmental (bills rendered in Great Britain)— 


17,943,203.16.4 

674,021.16.5 

1,568,405.15.9 

11,822.2.7 

13,565,761.3.11 

12,731,260.2.0 

326,398.3.3 

78, 871. 17. 5 

58,341.5.0 

153,585.17.10 

262, 066. 19. 5 


> 

29,908,931.30 




























Post office 






















47, .373, 758. 19. 11 

9, 000, 000. 0. 

213,426.0.0 
















Total 


.56,587,185.8.11 
1,500,000.0.0 


29.908,931.30 












Net total, British 


55,087,185.8.11 


29,908.931.30 








United States: 

Bills rendered in U. S. A 




45,494,345.36 
128, 497. 09 




Bills rendered in France 

Bills rendered in Great Britain 


3, 846. 10. 
173, 1.54. 17. 10 


3,162,530.18 


Net total, American 

Balances: 

British 

US . 




177,001.7.10 


45, 622, 840. 45 


3,182,530.18 


54,910,184.1.1 


15,713,909.15 
£3,741,406. 18. 10 


3,182,530.18 


($4.20 and frs. 30 to £1) 


3, 847, 491. 5. 8 


£106,084.6.10 










51,062,692.15.5 
797, 854. 11. 2 















APPENDIX XXIV. 

Liquidation of the Nitrate Pool 
(Sept. 15, 1919). 



Agreement between His Britannic Majesty's Government and the United 
States of America with respect to the Nitrate Pool. 
183176—20 10 



146 UNITED STATES LIQUIDATION COMMISSION. 

DEFINITIONS. 

The term " Great Britain " as herein used means His Britannic Majesty's 
Government. The term " United States " as herein used means the Govern- 
ment of the United States of America. The term " Nitrate " as herein used 
means refined nitrate of soda. The term " Pool " as herein used shall be 
taken to mean the arrangement between Great Britain and the United States 
entered into in the latter part of 1918, pursuant to which the stoclis of nitrate 
of the two Governments, to the extent that they constituted a surplus in excess 
of their respective internal requirements, were considered as belonging to a 
common pool, and pursuant to which each Government's transactions there- 
after, in regard to such surplus stoclis, were considered to be on behalf of such 
pool. A ton in this agreement means a long ton consisting of 2,240 pounds. A 
quintal means the ordinary Chilean quintal of which there are twenty-two to 
the ton of 2,240 pounds. 

RECITALS. 

Various misunderstandings have arisen as to the nature, force, and effect 
of the pool and each of the above-named Governments has put forward certain 
claims in respect thereto. There is now no useful function for the pool to con- 
tinue to perform and the parties hereto desire to settle and adjust all the 
aforesaid claims, to equitably apportion between the two Governments the re- 
maining nitrate stocks of the pool, and to finally liquidate and settle the pool, 
its obligations, profits or losses, and all matters pertaining thereto. 

, AGREEMENT. 

Now therefore, in consideration of the mutual agreements herein contained 
it is agreed as follows : 

Article I. The contributions of nitrate by said Governments to the pool are 
fixed at the following approximate quantities : 

Tons. 

His Britannic Majesty's Government 436, 300 

United States of America 156,776 

Total pool contributions 593, 076 

The unsold balance of nitrate remaining in the pool at the date hereof, is ap- 
proximately 225,155 tons as more fully set forth in Schedule I hereto attached 
and made a part hereof. For the purposes of the liquidation of the pool the 
foregoing figures and schedule may be clianged by mutual agreement to con- 
form to the facts, as they subsequently may be determined to be, without 
otherwise affecting the terms of this agreement. 

Article II. The above-described unsold balance shall be divided between the 
two Governments in shares in the proportions that their respective tonnage 
contributions to the pool are to the total pool contributions. The nitrate so ap- 
portioned to the United States shall be made up of the nitrate stocks in the 
United States, and in Canada respectively, together with such American pur- 
chased stocks in Chile as shall be mutually agreed upon in an amount suf- 
ficient to complete its said share. The nitrate so apportioned to Great Britain 
shall be made up of the nitrate stocks in the United Kingdom, and the British 
purchased nitrate stocks in Chile, together with the balance of the American 
purchased nitrate stocks in Chile. 



UNITED STATES LIQUIDATION COMMISSION. 147 

Article III. The United States shall pay to the pool, by means of a debit 
to it in the settlement of the pool's accounts, eight shillings and sixpence 
(8/6d.) per quintal for the stocks now in the United States and Canada, plus 
an ocean freight charge of $17.50 per ton and a sum equal to the commercial 
marine insurance charges for the shipment of such nitrate from Chile to its 
present location at rates existing on September 15, 1919. Great Britain 
shall pay to the pool, by means of a similar debit, eight shillings and sixpence 
(8/6d.) per quintal f. a. s. for the stocks located in Chile; and eight shillings 
and sixpence (8/6d.) per quintal for the stocks now lying in the United King- 
dom, plus an ocean freight charge of 140 shillings per ton and a similar marine 
insurance charge. Some portions of the nitrate stocks may be " ordinary " 
instead of " refined " and if so shall be taken by the United States and Great 
Britain as part of their respective shares in proportions to be agreed upon 
at a reduction in the price above mentioned of 4 pence per quintal, and such 
fact shall not otherwise afEect the terms of this agreement. 

Article IV. Upon the execution of this agreement title to the stocks now 
lying in the United Kingdom, United States, and Canada, respectively, shall 
pass to the respective Governments entitled thereto, as herein provided, as of 
September 15, 1910, and title to the stocks in Chile shall so pass when the 
allocation of the various parcels has been agreed upon as provided in Article 
II hereof. Delivery of the nitrate shall be taken in each case where it lies 
save that the nitrate in Chile shall be put free alongside at the expense of 
the pool. Each of said Governments may dispose of any or all of its share 
of stocks immediately upon the execution of this agreement and may advance 
any sums that may be necessary to accomplish delivery thereof. Such ad- 
vances shall be a charge against the pool in so far as they are made to meet 
a pool liability herein provided. 

Article V. Great Britain shall pay or reimburse the United States the costs 
of breaking the stocks in Canada sufHcient for bagging and the costs of re- 
bagging the same where necessary (other than the cost of the bags). The 
cost of the bags so used shall be borne by the United States. Neither the 
costs of breaking and bagging nor the cost of the bags shall be a charge 
against the pool. 

Article VI. After the 15th of September, 1919, the nitrate shall be at the 
risk and all charges save as provided in Article V hereof and such as may be 
necessary to put the nitrate in a deliverable condition shall be for the account 
of the Government which acquires the particular stock as herein provided. All 
charges and costs which have been properly paid or incurred in connection 
with the acquisition, custody, or disposal of the total stocks of the pool up to 
and including the 15th day of September, 1919, shall be regarded as having 
been paid or incurred for the account of the pool. Such charges and costs 
shall include the purchase price of the pool nitrate, freight or other trans- 
portation charges, handling, insurance, storage, other carrying charges, and 
brokerage, in respect thereto, together with all other expense which has arisen 
from the purchase, disposal, or custody, or transportation thereof, including any 
administrative expenses and similar charges which are attributable solely to 
the pool. All costs paid in dollars by the United States prior to November 
11. 1918, in respect to nitrate turned over to the pool by it shall be converted 
to a sterling basis at a rate of exchange of 4.76, subsequent payments of dol- 
lars by the United States on behalf of the pool shall be credited to the United 
States at the rate of exchange ruling at the date the particular payment shall 
have been made. All advances by either Government on account of the pool 
shall bear interest at the rate of five per cent (5%) per anninn. In respect 
to advances made prior to the 11th day of November, 1918, interest shall accrue 



148 UNITED STATES LIQUIDATIOI^ COMMISSION. 

from that date, and in respect to subsequent advances, from the date of the 
advance, and run to and including the 15th day of September, 1919. Such 
interest shall be included as a cost on account of the pool. The proceeds of 
all sales made on account of the pool shall be credited to it and interest at 
said rate shall be credited thereon from the date of sale to the 15th day of 
September, 1919. Any advances made by either Government after the 15th 
day of September, 1919, in the payment of any obligation which arose on ac- 
count of the pool prior to said date, shall bear interest at the aforesaid rate 
from the date of such advance until the reimbursement thereof by the pool. 
Article VII. The profits or losses of the pool, as the case may be, shall be 
determined as expeditiously as possible as of the 15th day of September, 1919, 
including in such determination the transactions for the liquidation of the Pool 
herein provided. Such profits or losses shall be divided between, or borne by, 
Great Britain and the United States in the proportions provided in Article II 
hereof for the apportionment of the nitrate stocks of the pool. 

Article VIII. The United States shall not dispose of any part of its share of 
the nitrate stocks of the pool in the United Kingdom or in the Dominions of 
the British Empire, except that it may sell in Canada an amount equal to its 
Canadian stocks, and Great Britain shall not dispose of any part of its share in 
the United States or its possessions or territories. Each Government shall 
secure a stipulation from the purchaser from it that such purchaser and pur- 
chasers in turn from it shall be bound by the same restrictions as the selling 
Government. 

Akticle IX. The general custom of trade shall apply to the transactions 
forming the subject of this agreement except where special provi.sion is ex- 
pressly made herein. 

In witness whereof, this agreement has been executed in four parts, each 
having the full force and effect of the original, by His Britannic Majesty's 
Government, acting through the minister of munitions, and by the United 
States of America, acting through the United States Liquidation Commission — 
War Department, Edwin B. Parker, chairman, as of the 15th day of September, 
A. D. 1919. 
Witness : 

Rurtrs J. Trimble. 

His Britannic Ma.jesty's Go^'ERNMENT, 
By Henry Howard Piggott, 
For and on Behalf of the Minister of Munitions, Assistant Secretary. 
Witness : 

RUFUS J. Trimbi^. 

United States of America, 
By Edwin B. Parker, 

Chairman of the United States Liqui- 
dation Commission — War Department. 

(Copy.) 

Ministry of Munitions of War, 
Surplus Government Property Disposal Board, 

Explosives and Chemicals Section, 
Storey's Gate, Westminster, S. W. 1, 10th November, 1919. 
Dear Sir : I am sorry that it has not been possible for me to write you earlier 
putting on record the arrangements that were made at our interview on 5th 
November. 



UNITED STATES LIQUIDATION COMMISSION. 149 

The contributions of nitrate set out in Article I of the agreement were modi- 
fied by the addition of 328 tons to the British figure and 620 tons to the U. S. A. 
figure ; the revised figures being as follows : 

Tons. 

His Britannic Majesty's Government 436, 628 

U. S. A. Government 157,396 

Total pool contributions 594, 024 

The figures in Schedule I were further revised to read as follows : 
Great Britain : Tons. 

Stocks in Chile 2, 050 

Stocks in U. K 58,468 

Stocks in Canada ■— 16, 598 

77, 116 

America: ■■*' 

Stocks in Chile 120, 681 

Stocks in America 28, 376 

149, 057 

226, 173 
A fresh calculation was made showing the proportions of unsold stocks to be 
as follows : 

His Britannic Majesty's Government : Tons. 

Stocks in U. K 58,468 

British stocks in Chile 2, 050 

U. S. A. stocks in Chile 105, 727 

166, 245 

U. S. A. Government: 

Stocks in Chile 14, 954 

Stocks in U. S. A 28, 376 

Stocks in Canada 16, 598 

59,928 

It was understood that you were agreeing these figures by cablegram, and I 
hope to receive your confirmation at a very early date. 
Yours faithfully, 

{Signed) H. S. Mingabd. 

Schedule I. — Unsold balance remaining in 'pool at 15 Sept., 1919. 

Great Britain : Tons. 

Stocks in Chile 2, 050 

Stocks in U. K 58, 468 

Stocks in Canada 16, 200 



76, 718 



America : 

Stocks in Chile 120, 222 

Stocks in America 28, 215 



148, 437 
225, 155 



The above figures are approximate only. 



150 



UNITED STATES LIQUIDATION" COMMISSION. 

APPENDIX XXV. 

Authorisations to Pay Claims. 



Num- 
ber of 
claims. 


Arising in— 


Kind of money. 


Amount 
claimed by 
claimant. 


Amount 
allowed by 
Commission. 


328 


France 


French francs 


76,949,049.35 

3, 553, 399. 22 

391, 252. 40 

40,991.00 

1,650.35 

370,793/1/4 


32,037,529.20 


63 


Switzerland 


Swiss francs 


2,034,096.60 
286, 602. 40 


4 


Spain 


Spanish pesetas 


1 


France . 


Swedish kroner. . . 


37,199.00 


1 


England 


American dollars 


1,650.35 


49 


England 


English pounds 


364,449/17/10 








446 





Note. — Does not include claims of foreign Governments. 

Claims Disallowjsd by Commission. 



Num- 
ber of 
claims. 



Arising in — 



Kind of money. 



Amount 
claimed by 
claimant. 



53 



France 

Spain 

England 

Switzerland 
England 



French francs . . 
Spanish pesetas 
Swedish kroner 

Swiss francs 

English pounds 



3,583,698.63 

90,000.64 

19,374.71 

109,076.76 

952/0/0 



APPENDIX XXVI. 

Fkench-American Artilleky Under Stettinius-Loucheur Arrangement. 



< 1 ) artillery components to be delivered to FRANCE BY THE UNITED STATES. 

(a) 75-mm. material: 

100 roughly machined recuperator forgings monthly, September, 1918, 

to June, 1919. 
250 assembled carriages, without recuperators and without sights, prior 

to December 31, 1918. 
150 assembled carriages monthly, without recuperators and without 

sights, January to June, 1919. 
2,880 carriage limbers, i 

6,000 caissons, i prior to December 31, 1918. 

8,640 caisson limbers, ] 
A total of 2,640 additional caissons from January to June, 1919. 

(b) 155-mm. Schneider howitzer material: 

76 finished recuperators during September, 1918. 

810 finished recuperators between October 1 and December 31, 1918. 

200 finished recuperators between January 1 and May 1, 1919. 

622 finished howitzers during September, 1918. 

210 finished howitzers between October 1 and December 31, 1918. 

300 finished howitzers between January 1 and May 1, 1919. 

386 finished limbers to December 31, 1918. 

746 finished carriage limbers between January 1 and May 1, 1919. 

3,396 caissons prior to December 31, 1918. 



UNITED STATES LIQUIDATION COMMISSION". 151 

<c) 155-mm. G. P. F. material: 

50 finished guns and carriages without recuperators, prior to December 

31, 1918. 
400 roughly machined recuperator forgings prior to June 30, 1919, of 

which 60 had been floated prior to September 12, 1918; subsequent 

deliveries to be at rate of 40 per month. 
300 carriage limbers prior to December 31, 1918. 

(2) GUNS TO I5E DELIVEKED BY PRANCE TO THE UNITED STATES. 

{«) 75-mm. guns complete with 1 limber and 1 caisson: 

September 288 

October, | 

November, \ per mouth 300 

December, 1 

From January 1, 1919, to June 30, 1919, per month 350 

( h ) 155-mm. liowitzers : 

To January 1, 1919, per month 140 

From January 1, 1919, per month 160 

(c) 155-mm. guns : 

October 40 

November 40 

December 45 

From January 1, 1919, per month 45 

(d) In addition the French to deliver all the materials and parts of materials 

necessary for the maintenance of batteries in service, observing tlie 
co-efficients for maintenance employed in the French Army. 



APPENDIX XXVII. 

(1) French Artillery and Ammunition Agreement 
(Aug. 28, 1919). 

Agreement between the Government of tlie United States and the Govern- 
ment of France, concerning the final settlement of tlie supplying of artillery 
and ammunition, undertaken by France on behalf of the United States up 
to the date of the armistice of November 11th, 1918, and other matters. 

Preamble. — At the signature of the armistice of November 11th, 1918, tlie 
French Government had accepted orders for a large amount of ammunition and 
artillery materiel to be delivered to the United States Government, which 
were then in course of execution ; and certain negotiations had also been en- 
tered into, relative to the furnishing of certain additional artillery materiel 
for which no final agreement had been reached and for which the United States 
Government had not yet placed formal orders. The United States Government, 
on its part, had supplied to the Frencli Government 550 155-mm. howitzers, 
intended to be used in the compo«-;ition of the materials to be transferred to 
the United States. 

The French Government had also agreed to machine for the United States 
400 rough cradles for 155-inm. G. P. F. guns, of which 110 had been delivered 
by the United States and 00 were in process of machining on November 
11th. 1918. 



152 UNITED STATES LIQUIDATION COMMISSION. 

A verbal agreement (confirmed by letters of December 7th, 1918, from Mr. 
Loucheur, of December 7tli, 1918, from Mr. Stettinius, and of December 20tli, 
1918, and January 3rd, 1919, from Col. Mercier was i-eached between the 
Ministre de I'Armament, representing the French Government, and Mr. 
Stettinius, special representative of the United States Government, concern- 
ing the final settlement of the orders for artillery materials and ammunition 
undertaken by France on behalf of the United States and other matters ; and 
this agreement is now drawn up in the final form, as follows : 

Between the United States Government, represented by E. D. Bricker, 
Colonel, Ordnance Department, United States, on behalf of the Chief of 
Ordnance of the United States Army, duly appointed, and the French Govern- 
ment, represented by M. le G6n#ral Maurin, Direeteur de I'Artillerie, duly 
appointed, is agreed as follows : 

Art I. General provisions. — (o) All materials and accessories, ammunition or 
ammunition components, delivered by the Government of France and accepted 
by the American Armies or delivered by the United States Government and 
accepted by the French Armies, up to November 11th, 1918, inclusive, shall 
remain the property of the accepting Government and shall be paid for at the 
prices previously agreed to for items of the same model belonging to the 
same or previous orders. 

(&) Save the exceptions provided for in the present covenant and excepting 
all material delivered and accepted on or before November 11th, 1918 ; all orders 
accepted by the French Government for the United States Ordnance Depart- 
ment covering artillery mat§riels, ammunition, accessories, and spare parts, and 
all orders for projectiles finished or unfinished, placed for or by the French 
Government in America with the United States Ordnance Department up to 
November 11th, 1918, inclusive, are hereby cancelled by mutual agreement. No 
indemnity of any kind whatsoever shall be paid by the United States Govern- 
ment or by the French Government for the cancellation of these orders. 

(c) All ammunition and ammunition components of American make, not 
specified in Art. I, par. (a) above, existing in the depots of French general 
reserve storehouses (Entrepots de Reserve Gengrale Francais) shall be removed 
and put at the disposal of the United States. 

Likewise all ammunition of French make now in the said storehouses, not 
specified in Art. I, par. (a) above, shall be kept by the French Government. 

(d) The United States Government has previously delivered to the French 
Government 550 155-m/m howitzers finished with breech mechanism; 275 of 
these guns shall be satisfactorily assembled to the carriages belonging to the 
700 materiels of this type specified in Art. II, par. (&), in place of the same 
number of similar howitzers of French manufacture. Their value (reckoned 
at frs. 23,466 each, which is the cost price of identical material of French 
make), i. e., a total of frs. 6,453,150, shall be deducted from the total price of 
155-m/m howitzer materiels transferred. 

The other 275 howitzers remain the property of the United States. It is 
stated by the French Government that one of these burst during the regulation 
firing tests, because of weakness developed by these tests; a report will be 
furnished by the French Government certifying to these facts. The remaining 
274 howitzers shall be delivered to the Ordnance Department and shipped to 
America at the expense of the United States Government. 

(e) The United States Government has delivered to the French Government 
110 155-m/m G. P. F, rough cradle forgings, being part of an order for 400 
rough forgings; 60 of these cradles, being at the present time in course of 
machining, shall be entirely completed by France and delivered to the United 
States. The settlement will be the subject of an agreement when the costs of 



UNITED STATES LIQUIDATION COMMISSION. 153 

the service rendered shall have been determined ; the sum to be paid shall be 
the actual cost price to the French Government. 

The 50 rough forgings remaining shall be delivered to the Ordnance Depart- 
ment for return to the United States at the expense of the United States Govern- 
ment. The 290 forgings not yet delivered shall not be shipped to France. 

Art. II. Materiel to be supplied. — The French Government undertakes to 
supply to the United States Governniert, which accepts and undertakes to pay 
for the following materiel : 

(a) 944 75-m/m gun materiels, model 1897, with limbers. 

(b) 700 155-m/m howitzer materiels, model 1917, Schneider design, with 
limbers. 

(c) 198 155-m/m G. P. F. materiels, with limbers. 

(d) Collection of additional parts as hei-einafter specified. 

Art. III. Composition of the materiel to be delivered. — The articles included 
in the composition of the materiels and collections mentioned in Art. II are 
enumerated in the tables number 1 to 7, attached to and forming a part of 
this contract. 

Abt. IV. Conditions of acceptance and delivery. — The above-mentioned ma- 
teriels, of the types in use in the French Army and complying with the regula- 
tion technical requirements of acceptance provided for their manufacture, shall 
be delivered at such places in France as shall be indicated by the chief ordnance 
officer, A. E. F., by April 1, 1919, or at later dates, when the United States 
authorities are prepared to accept delivery. 

Abt. V. Prices and conditions relative to same. — The transfer prices of above- 
mentioned materiels (Art. II) are fixed as follows: 

Francs. 

(a) 312 75-m/m materiels with limbers, at frs. 30,080 the unit 

(Table No. 1) 9,384,960 

(b) 632 75-m/m gun materiels with limbers, at frs. 30,018 the 

unit (Table No. 2) 18,971,376 

(c) 236 collections of spare parts at frs. 1,875 each (Table No. 3) _ 442, 500 

(d) 700 155-m/ni howitzer materiels with limbers, model 1917, 

at frs. 89,000 the unit (Table No. 4) 62,300,000 

(e) 198 155-m/ni G. P. F. materiels with limbers, at frs. 145,850 

the unit (Table No. 5) 28,878,300 

if) Set of additional articles, spare parts, etc., for 155-m/m 

howitzers (Table No. 6) 2, 524, 445. 40 

(g) Sets of additional articles and spare parts, etc., for 155-m/m 

G. P. F. (Table No. 7) 1,453,456.05 

Total •- 123, 955, 037. 45 

To be deducted, the value of 275 155-m/m guns (see Art. I, 
par. id)) 6,453,150 

Total 117, 501,887. 45 

The total value of the transfer granted amounts to the sum of one hundred 
seventeen million five hundred and one thousand eight hundred eighty-seven 
francs forty-five centimes. 

These prices represent, as far as it has been possible to reckon them, the 
actual cost prices to the French Government without profit. 

They include all royalties and premiums for the use of patents or secret 
processes, which may affect the use of any part of the material transferred. 



154 UNITED STATES LIQUIDATION COMMISSION. 

The French Government agrees to protect the United States against all obli- 
gations and all claims for royalties or other rights resulting from the use of 
the material transferred with the exception of the following reservation : 

Whereas valid patent rights may exist concerning this material, rights 
which have never been published and which are still kept secret in virtue of the 
stipulations of the law of April 12th, 1916; and whereas, furthermore, legal 
claims may be made in the future; and whereas the French Government may 
be obliged, in order to give satisfaction to such claims, to make payments which 
will thus increase the present cost price of the transferred patented elements ; it 
is therefore agreed that if, subsequent to the signing of the present covenant, 
the French Government should be legally forced to pay, for any part of the 
material transferred to the United States by the present covenant, aa in- 
demnity in the form of a royalty to the proprietor of a patent now held secret 
by virtue of the above-mentioned law, the United States will, in such case, in- 
demnify the French Government for the additional expenses by paying, in 
addition to the transfer price, a sum, the ratio of which to the whole amount 
paid by the French Government will be equal to the ratio of the number of 
patented articles transferred to the United States to the whole number of such 
articles manufactured by or for the French Government. 

These provisions apply only to transfers referred to in the present covenant 
and do not modify any conditions or clauses to the contrary which may have 
been provided for in other covenants already made between the Governments. 

Abt. VI. Payments. — After presentation and examination of the proper re- 
ceipts and vouchers, the American Government will make settlement, as to the 
indebtedness created by this contract, in such manner as shall be in use for such 
.settlements between the two Governments at the date of the settlement. 

In conformity with the. American law neither any member or delegate of the 
American Congress, nor any person belonging to or employed in the military 
services of the United States shall be admitted to any share in this contract, 
nor to obtain any profit from it. 

In conformity with the French law, the amount of the transfer belongs in 
full to the French treasury ; neither any commission nor any sum of any kind 
can be given, no matter under what form, to anybody whomsoever. 

Made out in six copies, at Paris, on the 28th day of August, 1919. 

Name and capacity of the representative of the French Government : 

L. Maurin. 

Name and capacity of the representative of the American Government : 

E. D. Bricker, 
Colonel, Ordnance Department, for Chief of Ordnance, 

War Department, United States of America. 

Witness : 

F. A. Pattison, 

Major, Ord. Dept. 

Approved : United States Liquidation Com- 
mission — War Department, 
Edwin B. Parker, Chairman. 



UNITED STATES LIQUIDATION COMMISSION. 



155 



(2) Supplement to French Artillery and Ammunition Contract (Dated 

Nov. 20, 1919). 



This contract, entered into this 20th 
day of November, 1919, by and be- 
tween the United States of America 
(hereinafter called "America"), act- 
ing throngh the United States Liqui- 
dation Commission — War Department, 
Edwin B. Parker, chairman, of the one 
part, and the Republic of France (here- 
inafter called "France"), acting 
through M. le General Maurin, direc- 
teur de I'artillerie, of the other part, 
wituesseth : 

That whereas on the 28th day of 
August, 1919, the parties hereto en- 
tered into an agreement " concerning 
the final settlement of tlie orders for 
artillery materials and ammunition 
undertaken by France on behalf of the 
United States and other matters " ; 
and 

Whereas subdivision (e) of Art. I 
of the said contract of August 28, 1919, 
{irovides in part as follows : 

"(e) The United States Government 
has delivered to the French Govern- 
ment 110 1.55-m/m G. P. F. rough 
cradle forgings, being part of an order 
for 400 rough forgings. Sixty of these 
cradles, being at the present time in 
course of machining, shall be entirely 
completed by France and delivered to 
the United States. The settlement will 
be the svibject of an agreement when 
the costs of the service rendered shall 
have been determined ; the sum to be 
paid shall be the actual cost price to 
the French Government " ; and 

Whereas the work of machining the 
said 60 cradles has now been completed 
by the French Government and the ac- 
tual cost thereof is frs. 861,000 ; 

Now, therefore; in consideration of 
the premises, it is agreed between the 
parties hereto that America shall pay 
to France the said sum of frs. 861,000, 
the payment of which is hereby ad- 
mitted and acknowledged by France in 
full and final payment and settlement 



Ce contrat, redige le 20 Novembre 
1919, a ete etabli par et entre la Gou- 
vernement des Etats Unis (appele ci- 
apres "Amerique") Represente par la 
Commission de Liquidation des Etats- 
Unis du Departement de la Guerre, 
Edwin B. Parker, President, d'une 
part; et la Republique Francaise (ap- 
pelee ci-apres "France"), representee 
par M. le General Maurin, Directeur 
de I'Artillerie, d'autre part ; 

Etant donne que le 28 Aout 1919 les 
parties ont conclu un accord concer- 
naut le reglement final des ordres pour 
le materiel d'artillerie, les munitions 
et autres materiels entrepris par la 
France pour le compte des Etats- 
Unis ; et 

Etant donne qu'au paragraphe 
(e) de I'Art. I du dit Contrat du 
28 Aout 1919 il est meutionne ce qui 
suit : 

"(e) Le Gouvernement des Etats- 
Unis a delivre au Gouvernement Fran- 
cais 110 ebauches de glissieres pour 
canons de 155-m/m G. P. F. faisant 
partie d'une commande de 400 
ebauches. 60 de ces glissieres etant 
actuellement en cours d'usinage seront 
entierement finies par la France et 
livrees aux Etats-Unis. Le reglement 
fera I'objet d'un accord lorsque le cout 
du travail execute aura ete determine ; 
la somme a payer sera le prix de re- 
vient pour le Gouvernement Fran- 
cais ; " et 

Etant donne que le travail de fini- 
tion des 60 glissieres sus-indiquees est 
maintenant complement termine par le 
Qouvernement Francais et que le cout 
du travail s'eleve a 861,000; 

En consequence, etant donne ce qui 
precede, il a ete convenu entre les par- 
ties sus-indiquees que 1' Amerique 
paiera a la France la dite somme de 
861.000 Frs. Ce paiement est de ce 
fait admis et reconnu par la France 
comme reglement total et definitif de 



156 



UNITED STATES LIQUIDATION COMMISSION. 



of the balance due France under the 
said subdivision (e) of Art. I of the 
said contract of August 28tli, 1919. 

In witness wliereof, on tlie day and 
year first above written, this contract 
has been executed in six parts, each 
having the full foi-ce and effect of an 
original, by the United States of Amer- 
ica, acting through the United States 
Liquidation Commission — War Depart- 
ment. Edwin B. Parker, chairman, 
and by the Republic of France, acting 
through M. le General Maurin, di- 
recteur de I'artillerie. 

United States of America, 
By Edwin B. Parker, 

Chairman United States 
Liqtiidation Commission — 
War Department. 
Republic of France, 
By L. Maurin, 

Directeur de VArtillerie. 



la balance due a la France aux termes 
du dit paragraphe (e) de I'Art. I du 
dit Contrat du 28 Aout 1919. 

En foi de quoi, le jour et I'aunee 
precites. ce Contrat a ete redige en six 
exemplaires, chacun d'eux ayant la 
meme valeur et effet qu'un original, 
par les Etats-Unis d'Amerique, repre- 
sentes par la Commission de Liquida- 
tion des Etats-Unis, Departement de la 
Guerre, Edwin B. Parker, President, 
et par la Republique Francaise, repre- 
sentee par M. le General Maurin, Di- 
recteur de I'Artillerie. 

Etats-Unis D'Amerique, 
Par Edwin B. Parker, 
President de la Commission de Liqui- 
dation des Etats-Unis du Departe- 
ment de la Guerre. 

Republique Francaise, 
Par L. Maurin, 

Directeur de VArtillerie. 



APPENDIX XXVIII. 



French Air Service Settlement of November 8, 1919. 



Memorandum of settlement between 
the respective Air Services of the 
United States of America and the Re- 
public of France dated November 8, 
1919. 

Whereas in the general settlement 
heretofore negotiated between the Air 
Service of the War Department of the 
United States of America (hereinaf- 
ter called "America") and the Air 
Service of the Republic of France 
(hereinafter called " France"), France 
was entitled to receive some American 
Liberty motors and spares of the value 
of sixteen million eight hundred and 
five thousand five hundred dollars 
(.$16,80.5,500) which have been retained 
by America and America was entitled 
to receive airplanes and airplane ma- 
terials of French manufacture of the 
value of ninety-eight million three hun- 
dred forty-four thousand and fourteen 



Memorandum de Reglement entre les 
Services A6ronautiques respectifs des 
Etats-Unis d'Amerique et la Republique 
Francaise en date du 8 Novembre 1919. 

Etant donne que dans le r&glement 
general en discussion jusqu'a ce jour 
entre I'Air Service du War Departe- 
ment des Etats-Unis d'Amerique (ci- 
apres d^nommS "Amerique") et la Di- 
rection de I'A^ronautique de la Repu- 
blique Francaise (ci-apres d§nomm§e 
"France"), la France etait en droit 
de recevoir des moteurs Liberty et 
pieces de rechange d'une valeur de 
seize millions huit cent cinq mille cinq 
cents (16,805,500) dollars qui ont et6 
retenus par 1' Amerique et que 1' Ameri- 
que etait en droit de recevoir des avions 
et du materiel aeronautique provenant 
des usines francaises d'une valeur de 
quatre vingt dix huit millions trois 



UNITED STATES LIQUIDATION COMMISSION. 



157 



(frs. 98,344,014) francs which have 
been retained by France. 

Now, therefore, it is agreed : 

That America shall retain the Lib- 
erty motors and spares above men- 
tioned of the value of sixteen million 
eight hundred and five thousand 
five hundred ($16,805,500) dollars, the 
French bills for which against America, 
stated in dollars and converted into 
francs at the rate of 5.8523 francs for 
one dollar, aggregate in amount 
ninety-eight million three hundred fifty 
thousand eight hundred and twenty- 
seven francs (98,350,827 frs.). 

That France shall retain the air- 
planes and airplane materials of French 
manufacture above mentioned of the 
value of ninety-eight million three 
hundred forty-four thousand and four- 
teen (98,344,014) francs. 

It is further agreed that said bills 
of America against France, when so 
converted, shall be offset against said 
bills of France against America leav- 
ing a balance due France of six thou- 
sand eight hundred thirteen frs. 
(6,813), for which amount France shall 
receive credit in the settlement of ac- 
counts between America and France 
whereupon the said bills of America 
against France and the said bills of 
France against America shall be can- 
celled as fully satisfied. 

Attached hereto and marked for iden- 
tification " Exhibit A" is the final state- 
ment of account between the United 
States of America and the Republic of 
France in connection with the general 
settlement for airplanes and motors 
from which it appears (a) that the 
total credit due America by France is 
twenty-one million two hundred sev- 
enty-two thousand two hundred fifty 
dollars (.$21,272,250) and (b) the total 
credit due by America is one hundred 
sixty-seven million seven hundred 
eigthy thousand sixty-six (167,780,066) 
francs plus one million eight hundred 



cent quarante quatre mille quatorze 
(98,344,014) francs qui ont et§ retenus 
par la France. 

II est en consequence aujourd'hui 
entendu : 

(1) Que I'Amerique retiendra les 
moteurs Liberty et pieces de rechange 
ci-dessus mentionnes d'une valeur de 
seize millions huit cent cinq mille cinq 
cents (16,805,-500) dollars dont les 
factures francaises sur I'Amerique 
etablies en dollars et converties en 
francs au taux de 5.8523 francs pour 
un dollar s'41event a un total de quatre 
vingt dix huit millions trois cents 
einquante mille huit cent vingt sept 
(98,350,827) francs. 

(2) Que la France retiendra les 
avions et le materiel aeronautique pro- 
venant des usines francaises ci-dessus 
mentiounees d'une valeur de quatre 
vingt dix huit millions trois cent 
quarante quatre mille quatorze (98,- 
344,014) francs. 

(3) II est de plus entendu que les 
dites factures de I'Amerique sur la 
France, apr§s cete conversion, seront 
balancees avec les dites factures de la 
France sur I'Amerique laissant un 
produit dQ jl la France de six mille huit 
cent treize (6,813) francs, somme pour 
laquelle la France sera creditge sans 
le rdglement de comptes entre I'Ameri- 
que et la France sur quoi les dites 
factures de I'AmSrique sur la France et 
de la France sur I'Amerique seront 
anuulees comme completement reglfies. 

(4) Ci-joint et intitule " Tableau A" 
se trouve I'gtat final de compte entre 
les Etats-Unis d'Am^rique et la R6iju- 
blique Francaise se relatif aux regle- 
ments des avions et moteurs duquel 
^tat il appert (a) que la somme totale 
due a I'Amerique par la France est de 
ving et un millions deux cent soixante 
douze mille deux cent einquante 
(21,272,250) dollars, et (b) que la 
somme totale due k la France par 
I'Amerique est de cent soixante sept 
millions sept cent quatre vingt mille 
soixante six (167,780,066) frs. plus un 
million huit cent quatre vingt neuf 



158 



UNITED STATES LIQUIDATION COMMISSION. 



eighty-nine tliousand four hundred and 
three and 60/100 ($1,889,403.60) dol- 
lars. 

It is agreed by both parties hereto 
that the said statement is correct and 
shall form the basis of stating a final 
account in the general settlement now 
being negotiated between France and 
America, so far as concerns the Air 
Service transactions between France 
and America here referred to. 

United States of America, 
By Edwin B. Parker, 
Chairman, United States Liquida- 
tion Commission — War Department. 



mille quatre cent trois dollars et 
soixante cents (1,889,403.60 dollars). 

U est entendu entre les deux parties 
en cause que ledit 6tat est correct et 
sera la base de I'^tablissement du 
compte final dans le reglement g6n6ral 
actuellement en cours de negociation 
entre la France et I'Am^rique en ce qui 
regarde les transactions susvisSes entre 
les Services A^ronautiques Francais et 
Americains. 

Republique Francaise, 

Approuv6 le 10 Novembre 1919. 

Le President du Conseil Ministre de 
la Guerre. 

Direction de I'Agronautique : 

(Signed) M. Duval. 



"Exhibit A." — United States Liquidation Commission — War Department. 

Statement of acco-unt between the United States of America and the Republic 
of Franee in connection with general settlement for airplanes and motors. 





Amount in 
francs. 


Amount in 
dollars. 


Charges against France: 




21,272,250.00 








Total credit due United States from France 


21,272,250 00 


Credits due France: 

Airplanes and motors in process of construction at date Francs. 
of armistice 120, 859, 450. 00 


163,757,544.00 

3,910,217.00 

105,492.00 
6,813.00 




Cancellation indemnities for airplanes and motors 14, 710, 537. 00 

Spare parts in process of construction 19, 962, 553. 00 




Cancellation indemnity for spares 8, 225, 004. 00 








Total 163,757,544.00 

Miscellaneous materiel in process of manufacture . 3, 496, 628. 00 




Cancellation indemnities account of miscellaneous materiel 413, 589. 00 




Total 3,910,217.00 

Cost of delivery by aerial route of 596 airplanes @ fr. 177.00 
each 105, 492. 00 

Credit due France under exchange of Liberty motors for 
French airplanes and materiel ... 




Payments made on account of motors and spares that were 
hot credited against charge of $21,272,250.00 included in 
Cuthell agreement: 

April, 1919, frs. 9,641,406.26® 5.80 $1,662,311.43 




May, 1919, frs. 1,349,347.12 @ 6.05 . . 223,032.58 




July, 1919, frs. 26,184..37 @ 6.45 4,059.59 








frs. 11,016,937.75 1,889,403.60 


1,889,403.60 






Total credit due France from the United States 


167,780,066.00 


1,889,403.60 







UNITED STATES LIQUIDATION COMMISSION. 



159 



" Tableau A."- — Commission de Liquidation Ameeicaine — War Department. 

Etai (In conipte entre les Etats-Unis d'Amerique et la Rcpublique Francaise 
relatif au reglement general pour Ics avians et moteurs. 



Montant en 
francs. 



Montant en 
dollars. 



Dette de la France: 

Moteurs Liberty et pieces de reehanges, accord Cuthell du 29 mai 1919. 

Cr^lit total dti par la France aux Etats-Unis 

Sommes dues a la France: 

Avions et moteurs en cours de construction a la date Francs. 

de 1 'armistice 120, 859, 450. 00 

Indemnite de resiliation pour avions et moteurs 14, 710, 537. 00 

Pieces de rechanges en cours de construction 19, 962, 553. 00 

Indemnite de resiliation pour les pieces de rechanges . . 8, 225, 004. 00 



21, 272, 250. 00 



21,272,250.00 



Total 163, 757, .544. 00 

Materiel divers en cours de fabrication 3, 496, 628. 00 

Indemnite de resiliation pour le materiel divers 413,589.00 



Total 3, 910, 217. 00 

Collt de la livraison par voie de I'air de 596 avions: 177 

francs pour chacun 105, 492. 00 

Somme due k la France en vertu de 1 'T'change de moteurs 

Liberty contre du materiel aeronautique frangais 

Paiements effectues sm- le compte moteurs Liberty et 
pieces de rechange qui n'ont pas ete deduits du 
prix total de 21,272,250 dollars inclus dans I'accord 
Cuthell: 

Avril 1919, frs. 9,641,406. 26 au taux de 5. 80 $1,662,311.43 

Mai 1919, frs. 1,349,347. 12 au taux de 6.05 223,032.58 

Juil. 1919, frs. 26, 184. 37 au taux de 6.45 4,059.55 



frs. 11,016,937.75 
Somme totale due k la France par les Etats-Unis. 



1,889,403.60 



163, 757, .544. 00 

3,910,217.00 

105,492.00 
6. 813.00 



167, 780, 066. 00 



1,889,403.60 



1,889,403.60 



APPENDIX XXIX. 

Contract Between United States of America and Republic of France for the 
Settlement of Railroad Transportation and Other Claims, October 1, 1919. 



This conti-act entered into this first 
day of October, A. D. 1919, by and be- 
tween the United States of America 
(hereinafter called America), acting 
through the United States Liquidation 
Commission — War Department, of the 
one part ; and the Republic of France 
(hereinafter called France), acting 
through le Miuistre des Travaux Pub- 
lics des Transports et de la Marine 
Marchande, of the other part ; Wit- 
nesseth : 



Entre les Etats-Unis d'Amerique (ci- 
apr^s dgnommes Amerique), repre- 
sents par la Commission de Liquida- 
tion des Etats-Unis — War Department 
d'une part ; et la Republique Francaise 
(ci-aprgs denommee France), repre- 
sentee par Monsieur la Ministre des 
Travaux Publics des Transports et de 
la Marine Marchande d'autre part; la 
Convention suivante a ete passee el la 
date du 1° Octobre, 1919; 



Recitals. 



Expose. 



That whereas America upon its en- 
try into the war on April 6th, 1917, 
aranged with Prance to provide and 
to cause the French railroads to pro- 
vide, during the presence in France of 



Etant donne que I'Amgrique, au 
moment de son entree en guerre le 6 
Avril 1917, a convenu avec la France 
que celle-ci pourvoierait ou ferait 
pourvoir par les R^seaux Francais, 



160 



UNITED STATES LIQUIDATION COMMISSION. 



the American forces, transportation 
for the personnel, animals, and freight 
of said forces at rates not to exceed 
those to be paid by France for similar 
services; and France has provided or 
caused to be provided said transporta- 
tion ; and 

Whereas in connection with rail- 
road transportation in France the re- 
spective parties and the French rail- 
roads furnished or caused to be fur- 
nished to one another the use of cer- 
tain terminal facilities at docks and 
elsewhere, also locomotives, cars, ma- 
chine shop and other equipment, the 
services of certain personnel, and they 
provided to one another certain sup- 
plies and materials, and performed for 
one another certain services, the com- 
pensation for which remains to be set- 
tled and adjusted ; and 

Whereas there exist various claims 
in France by eaeh of the parties 
against the other, and by the French 
railroads against America and by 
America against the French railroads, 
arising out of losses of or damages to 
freight and damages to railway prop- 
erty ; and 



Whereas the parties desire to ad- 
just any and all claims and demands 
of every kind, nature, and description 
whatsoever of France or of the French 
railroads against America, and any 
and all claims of every kind, nature, 
and description whatsoever of Amer- 
ica against France or against the 
French railroads arising out of the 
transactions referred to in the fore- 
going recitals, and all claims of the 
French Navigation Office, up to and in- 
cluding September 30, 1919 ; and 

Whereas the parties desire to re- 
adjust said arrangement entered into 
upon America's entry into the war for 
the transportation over the French rail- 
roads of the personnel, animals, and 



pendant la presence des troupes Ameir^- 
caines, aux transports de personnel, 
animaux et materiel des dites forces a 
des tarifs ne devant pas exc6der ceux 
payes par la France pour des services 
semblables. Etant donne que la 
France a pourvu aux transports sus- 
vis6s, 

Vu que, en ce qui concerne les trans- 
ports sur les R^seaux Francais, les par- 
ties respectives et les Reseaux Fran- 
cais ont fourni, ou fait fournir les 
uns aux autres I'usage de certaines 
installations, soit aux ports, soit en 
d'autres points des dits Reseaux, de 
locomotives, wagons, ateliers et autres 
materiels, ainsl que les services de cer- 
tains personnels ; qu'ils se sont foup- 
uis reciproquement certains ravitaille- 
meuts et materiels, et se sont rendus 
mutuellement certains services dont la 
compensation reste a etablir et a liqui- 
der ; 

Etant donne, qu'il existe des recla- 
mations diverses en France de chacune 
des parties contre I'autre, et des Re- 
"seaux Francais contre I'Amerique, et 
de I'Amerique contre les Reseaux 
Francais, reclamation dues a des 
pertes ou a des dommages au materiel 
♦ransporte et k des dommages k des pro- 
priet^s des dits RSseaux de Chemin de 
Fer; 

Etant donn^ que les parties d^sirent 
regler chacune et toutes reclamations 
de tout espece, nature et genre, de 
France ou des Reseaux Francais contre 
rAm^rique et toutes reclamations de 
toute espece. nature et genre de 
I'Amerique contre la France ou les Re- 
seaux Francais, reclamations relatives 
aux questions exposSes dans les Ar- 
ticles suivants, et toutes reclamations 
de rOffice Francais de la Navigation, 
toutes ces reclamations coucernant la 
pgriode s'etendant jusqu'au 30 Sep- 
tembre, 1919, inclus ; 

Etant donne que les parties desirent 
remettre au point I'arrangement con- 
clu au moment de I'entree en guerre 
de I'Amerique pour le transport sur les 
Rgseaux Francais du personnel, ani- 



UNITED STATES LIQUIDATION COMMISSION. 



161 



freight of the American forces, in so far 
as it covers the period on and after 
October 1, 1919, until Deceml)er 31, 
1919, inclusive: 

Now, tlierefore, in cousi<leratiou of 
the premises and for the other consid- 
erations herein stated, it is agreed as 
follows : 

Akticle One. Agreement. — America 
will pay to France the sum of four 
luuulred and thirty-four million, nine 
hundred and eighty-five thousand 
three hundred and eighty-nine and 
73/100 (434.985,389.73) francs. 

Akticle Two. America waives any 
and all claims which it may or might 
have against France on account of or 
arising from any and all of the trans- 
actions referred to in the recitals of 
this contract up to and including Sep- 
tember 30. 1919. 

Article Three. America assigns to 
France any and all claims which 
America may or might have against 
the French railroads on account of or 
arising from any and all of the trans- 
actions referred to in the i*ecitals of 
this contract up to and including Sep- 
tember 30th, 1919, and will, accord- 
ingly, hand to France such statements 
of account as may permit France to 
make such claims against the French 
railroads. 

Article Four. France waives and 
will save America harmless from any 
and all claims which France or the 
French railroads may or might have 
against America on account of or aris- 
ing from any and all of the transac- 
tions referred to in the recitals of this 
contract, and all claims of the French 
Navigation Office, up to and including 
September 30, 1919. 



Article Five. On and after October 
1. 1919, and until December 31. 1919. 
France will furnish or cause the 
French railroads to furnish transpor- 
tation over the French railroads for 
the personnel, animals, and freight 
of said forces at the same rates at 
183176—20 11 



maux et materiel des Forces Ameri- 
caines, en taiit qu'il couvre la periode 
s'gtendant du 1'''" Octobre 1919, inclus, 
au 31 Decembre 1919. inclus. 

La convention suivante a 6t4 agree 
d'un commun accord eu egard aux con- 
siderations ci-dessus et ci-apres ex- 
posees : 

Article I. Accord. — L'Amerique re- 
connait devoir a la France la somme de 
quatre cent trente-quatre millions, neuf 
cent quatre-vingt cinq inille, trois cent 
quatre-vingt neuf francs, 73 centimes 
(434,985,889.73). 

Article II. — L'Amerique renonce a 
chacune et toutes reclamations qu'elle 
a, ou pourrait avoir contre la France, 
causees par ou provenant de chacune 
et toutes les questions mentionnees 
dans la teneur de la presente conven- 
tion .insqu'au 30 Septembre 1919 inclus. 

Article III. — L'Amerique transfere 
a la France tous les droits sans excep- 
tion qu'elle pent ou pourrait avoir 
contre les Reseaux Francais a cause 
ou du fait d'une ou quelconque des 
questions mentionnees dans I'expose de 
la presente convention jusque et y 
compris le 30 Septembre 1919, et remet- 
tra en consequence a la France les 
pieces de comptabilite qui lui per- 
mettent de formuler des declamations 
contre les Reseaux Francais. 

Article IV.— La France renonce a 
et decharge I'Amerique de, chacune et 
toutes reclamations que la France ou 
les Reseaux Francais ont ou auraient 
contre I'Amerique ^ cause, ou du fait 
de chacune et toutes questions men- 
tionnees dans I'exposg de la presente 
convention, ainsi que les reclamations 
de rOffice Francais de la Navigation, 
toutes ces reclamations pour la pe- 
riode s'etendant jusqu'au 30 Septembre, 
1919 inclus. 

Article V. — A partir du 1 er Octobr.' 
1919 et jusqu'au 31 Decembre 1919, la 
France assurera le transport sur le 
r^seau ferre francais du personnel, 
animaux et marchandises des Forces 
Amgricaines au meme tarif et sous les 
memos conditions qui seront appliques 



162 



UNITED STATES LIQUIDATION COMMISSION. 



which and ou the same terms and con- 
siderations under which said railroads 
shall, during the same period, furnish 
transportation for the personnel, ani- 
mals and freight of the French Army. 
In witness whereof, on the daj- and 
year tirst above written, this contract 
has been executed in four parts, each 
liaving the full force and effect of an 
original, by the United States of 
America, acting through the United 
States Liquidation Commission — War 
Department, Edwin B. Parker, chair- 
man ; and by the Republic of France, 
acting through le INIiuistre des Tra- 
vaux Publics, des Transports et de la 
Marine Marchande. 

United States of America, 
K.V Edwin B. Parker, 

Chnirman, l)dted states 
Liquidation Commission — 
War Department. 
Repurlic of France, 
By A. Claveitxe, , 

Ministre des Travaux, 
Publics des Trunsports et 
de la marine Marchwnde. 

1 October, 1919. 
M. le Ministre des Travaux I'ublics 

des Transports et de la Marine 

Marchande, Paris. 

It is understood that the term 
"' American forces " as used in the con- 
tract between America and France 
dated October 1, 1919, for the settle- 
ment of transportation matters, up to 
and including September 30, 1919, in- 
cludes the American land and naval 
forces and all affiliated organizations 
(like the Y. M. C. A., American Red 
Cross, Salvation Army, .Jewish "Wel- 
fare League, etc.) and that this settle- 
ment covers all claims arising out of 
transportation furnished on Ordres de 
Transport issued by American author- 
ity ; but, in waiving the claims referred 
to in Article Two of said contract 
America does not undertake to waive 
any claims which the American Red 
Cross may have arising out of trans- 
portation furnished to it on Ordres de 
Transport issued by the French Army, 
but oiilv ehiinis arising out of trans- 



pendant la meme i:)eriode aux trans- 
ports militaires francais. 



En foi de quoi, le jour et I'annes ci- 
dessus, la presente convention a ete 
faite en quatre expeditions, chacune 
ayant la valeur et I'elfet d'un original, 
par les Etats-Unis d"Ameri(iue agissant 
par I'intermediaire de la Commission de 
Liquidation des Etats-Unis, Ministere 
de la Guerre, Edwin B. Parker, presi- 
<lent ; et par la Republique Fi'ancaise, 
agissant par rintermediaire du Minis- 
tre des Travaux Pul)lics des Trans- 
ports et de la Marine Marchande. 
Etats-Unis d'Amerique, 
Par Edwin B. Parker, 
Le President de la Commission de 
Liquidation des Etats-Unis, Minis- 
tere de la Guerre. 

Republique Francaise, 
Par A. Claveille, 
Le Ministre des Travaux Publics 
des Tra)ispo)ts et de la Marine 
Marclunidc. 

1" Octobre 1919. 
Monsieur le Ministre des Travaux 

Publics des Transports et de la 

Marine Marchande, Paris, 

II est entendu que le terme " Forces 
Americaines." tel qu'il est employe 
dans la convention entre I'Amerique et 
la France en date due l*"" Octobre 
1919, pour le reglement des affaires 
de transport jusqu'au 30 Septembre 
1919 inclus, comprend les Forces 
Americaines de terre et de mer et 
toutes les organisations affiliees (comme 
le Y. M. C. A., la Croix-Rouge Amei'i- 
caine, I'Armee du Salut, le Welfare 
League Israelite, etc.) et que ce regle- 
ment couvre toutes reclamations cau- 
sees par les transports fournis sur or- 
dre de transport etablis par I'Autorite 
Americaine ; mais en ecai'tant les 
reclamations dont il est question dans 
I'article II dudit contrat, TAmerique 
n'entreprend pas d'ecarter les reclama- 
tions que la Croix Rouge Americaine 
aurait a formuler en raison de trans- 
ports k elle ; fournis sur ordres de 



UNITED STATES LIQUIDATION COMMISSION. 



163 



portatioii under Ordres de Transport 
issued h\ the A. E. F. 



(Signed) Edwin B. Parker, 

Chairman, T\ S. Liquidation 
('ommissiou—War Department. 
Accepted : Paris, 1 October, 1919. 
(Sisined) A. Claveille, 
Lc Miuistre des Travau.v 
I'liliJics f/fs- Transports 
ct de. la Marine Marchande. 



ti'iinsjtort etablis par I'Arniee Fran- 
caise, mais seulenient les reclamations 
causees par les transports par ordres 
<le transport etablis par I'A. E. F. 
(Si.siiied) EuwiN B. Parker, 

Prrsidoit, Coinniission de Liquida- 
tion U. S., Ministcre de la Guerre. 

Accept^: Paris, 1*"" Octobre 1919. 
(Signe) A. Claveille, 

Le Ministre des Traraux Pvljlie'i 
den Transports et de la Marine 
Marchande. 



APPENDIX XXX. 

Contract Between United States of America and Republic of France. 
October 1, 1919 — Port Dues Settlement. 



This cuntract. entered into this tirst 
day of October. A. D. 1919. by and be- 
tween the United States of America 
(hereinafter called America), acting 
through the United States Liquidation 
('(unniission — War Department, of the 
one part ; and the Republic of France 
(hereinafter called France), acting 
through le Ministre des Travaux Pub- 
lics des Transports et de la Marinb 
Mcrchande. of the other part ; wit- 
nesseth : 

Recitals. 

Tb.at irlicrctts, vessels operating in 
the service of or transporting persons 
or property for America liave, under 
an arrangement entered into between 
France and the American Expedition- 
ary Forces, used the ports of France 
since America's entry into tlie war on 
April 6th. 1917, and will use said ports 
until the total evacuation of France 
by tile American Forces ; and 

^^'ln'rra■s. claims b.ave been and are 
being made in connection with the use 
of said ports by said vessels, espe- 
cially im account of the nonpayment of 
l)ort dues (taxe de peage), and on ac- 
count of the expenses incurred in rais- 
ing rlie water level at St. Nazaire; and 

Wltcreay. the parties desire to settle 
and adjust all of said claims of every 
nature whatsoever now existing and to 



Entre le Gouvernement des Etats- 
Unis d'Amerique (ci-apres denommes 
Amerique) represente par la Commis- 
sion de Liquidation du Departement de 
la Guerre des Etats-Unis d'une part, 
et le Gouvernement de la Republique 
Frangaise (ci-apres denomniee France) 
represente par M. le Ministre des 
Travaux Publics des Transports et de 
la Marine Marchande d'autre part, il a 
ete conclu. a la date du 1 Octobre, 
1919, le contrat suivant : 

Expose. 

Etant donne que les navires, au 
service de I'Amerique, ou transportant 
du personnel ou des marchandises pour 
son conipte, d'apres une convention 
etablie entre la France et les. Forces 
Expeditionnaires Americaines, ont uti- 
lise les ports frangais depuis I'entree 
en guerre de I'Amerique, le 6 Avril 
1917, et les utiliseront encore jusqu'a 
1 "evacuation totale de la France par les 
Forces Americaines, 

Etant donne que des reclamations 
out ete faites et le sont encore, au 
sujet de I'usage des dits ports par les 
dits navires, particulierement a cause 
du non paienient des taxes de peage 
et au sujet des depenses occasionnees 
par le relevement du plan d'eau de St. 
Nazaire. 

Etant donne que les hautes parties 
contractantes desirant determiner et 
liquider toutes les reclamations telles 



164 



UNITED STATES LIQUIDATI0:N^ COMMISSIOK", 



readjust said arrangemeut iu so far as 
it concerns the period from the pres- 
ent date until the total evacuation of 
France by the American Forces ; 



Now, therefore, in consideration of 
the premises and for the other consid- 
ei-ations hei'ein stated, it is agreed as 
follows : 

Articie One. Aiireeinent. — America 
will pay to France the sum of three mil- 
lion {3,0(»0.0()0) francs. 

Akticle Two. France waives and 
will save America and said vessels, 
their owners, charterers or masters, 
harndess from any and all claims which 
France, or tlie chambers of commerce, 
or the municipalities of said ports, or 
any one whosoever, may have, on ac- 
count of the use of said ports by said 
vessels, from the entry of America into 
the war until the date hereof, for port 
dui>s ( taxe de peage) , or for expenses in 
raising the water level at St. Nazaire 
or elsewhere, or for any other port 
facility or service afforded to said ves- 
sels, sare only the special charges for 
pilotage, for the occupation of hangars, 
for the use of cranes, and for similar 
special facilities and services (herein- 
after designated "special services") 
for which America has been paying 
currently and will continue to pay 
when and as rendered. 



Article Three. France agrees that 
such vessels may. from the present date 
until the total evacuation of France 
by the American forces, use said ports 
witliout paying for said use during 
said period any of said port dues ( taxe 
de i>eage), and without paying any of 
the expenses for raising the water level 
at St. Nazaire or elsewhere, and with- 
out paying for any other port facility 
or service afforded to such vessels 
(save only said special services), and 
will save America and such vessels, 
their owners, charterers, and masters. 



qu'elles existent a I'heure actuelle et 
incurporer dans la presente convention 
tnui'.s celles qui s'api)liquent a la pe- 
riode s'etendant depuis ce jour jusqu'a 
Tevacuation totale de la France par 
les I^^orces Americaines ; 

La convention suiyante a ete passee, 
par applications des considerations ci- 
(lessus et suivant les dispositions con- 
tenues dans le present document : 

Article 1. Accord. — I'A m e r i q u e 
paiera a la France la somme de trois 
million de francs (3.000,000). 

Article II. La France exonore 
I'Amerique et les dits navires, ainsi 
que leurs proprietaires, locataires ou 
capitaines, de toutes les reclamations 
que le Gouvernement Fraucais, ou les 
chambres de conunerce, ou les muni- 
cipalites des dits ports, ou n'importe 
(]uelles autres autorites, peuvent faire 
vnloir, au sujet de I'usage des dits 
ports par les dits navires, depuis I'en- 
tree en guerre de I'Amerique jusqu'a la 
date ci-dessus indiquee soit pour des 
taxes de peage ou des depenses oc- 
casionriees par le relevement du plan 
d'eau de Saint-Nazaire ou autres ports, 
S()it pour tons autres services rendu s 
aux dits navires dans un port quel- 
conque ; exception est faite seulement 
pour les frais speciaux de pilotage, 
d'occupation de hangars, d'usage de 
grues et pour les avantages et services 
speciaux de meme nature (frais, avan- 
tages et services designes sous le 
uom ci-apres, de " Services speciaux " ) 
pour lesquels I'Amerique a pave et 
continuera de payer au fur et a 
mesure. 

Article III. — La France admet que 
les dits navires pourront, a partir de 
cette date jusqu'a I'evacuation totale 
de la France par les Forces Ameri- 
caines, utiliser les dits ports sans avoir 
a payer, pendant la dite periode, au- 
cune des taxes de peage, ni aucune des 
depenses de relevement du plan d'eau 
de St. Nazaire ou d'autres ports, ni 
aucun autre service rendu aux dits 
navires dans un port quelconque (ex- 
cepte seulement s'il s'agit des Services 
dits Speciaux) et elle exonerera par 
suite I'Amerique et les dits navires. 



UNITED STATES LIQUIDATION COMMISSION. 



165 



harmless from any and all claims on ac- 
count of all of the foregoing', save only 
claims on account of the said special 
services. 



In witness whereof, on the day and 
year hrst above written, this contract 
has been executed in four parts, each 
having the full force and effect of an 
original, by the United States of 
America, acting through tlie United 
States Liquidation Connnission — War 
Department, Edwin B. Parker, chair- 
man ; and by the Republic of France, 
acting through le Ministre des Travaux 
Publics des Transports et de la Marine 
Marchande. 



United States of Ajierica, 
By Edwin B. Parker, 
Chairiiidii. f'liited istateff Liquidation 
Com in is.sion — War Department. 



Bv 



Repvblic of France, 

A. Claveille, 

Le Ministre dea Travaux 

Publics des Transports 

et de la Marine Ma?-chande. 



aiusi que leurs proprietaires, locataires 
et capitaines, de toutes reclamations, 
conformement aux indications ci-des- 
sus, a I'exceptiou seuleraent des recla- 
mations concernant les Services dits 
Speciaux. 

En foi de quoi et a la date ci-dessus 
indiquee le present contrat a ete dresse 
en quatre exemplaires, pour valoir 
chacun d'eux comme original, par le 
Gouvernement des Etats-Unis d'Ame- 
rique agissant par I'iutermediaire du 
President de la Commission de Liqui- 
dation du Ministere de la Guerre des 
Etats-Unis, Edwin B. Parker, et par 
le Gouvernement de la Kepublique 
Francaise agissant par I'intermediaire 
de Monsieur le Ministre des Travaux 
I'ublics des Transports et de la Marine 
Marchande. 

Etats-Unis d'Amerique, 
Par Edwin B. Parker, 

President dela Commission 
de Liquidation du Departe- 
ment de la Ouerre des 
Etats-Unis. 

Republique Francaise, 
Par A. Claveili.e, 

Le Ministre des Travaux 
Publics des Transports et 
de la Marine Marchande. 



APPENDIX XXXI. 

Contract Between United States of America and Republic of France 
Evidencing General Settlement of All Mutual Accounts, Claims, and 
Demands Arising in Europe, November 20, 1919. 



This contract entered into this 20th 
day of November, A. D. 1919, by and 
between the United States of America 
(hei'einafter called "America"), act- 
ing through the United States Liqui- 
dation Commission — War Department, 
Edwin B. Parker, chairman, of the 
one part, and the Republic of France 
(hereinafter called "France") acting 
through the Controleur de I'Adminis- 
tration de I'Armee Edouard Boulanger, 
under reserve of the approval of the 
interested ministers, of the other part, 
vvitnesseth : 

Genera I considerations. 

That ichcreas, between the 6th day 
of April. 1917, and the 20th day of 



Le present contrat redige le 20 No- 
vembre 1919 a ete etabli par et entre: 

Le Gouvernement des Etats-Unis 
(appele ci-apres Amerique) represente 
par la Commission de Liquidation des 
Etats-Unis du Departement de la 
Guerre, Edwin B. Parker, president, 
d'une part, et la Republique Francaise 
(appelee ci-apres France) representee 
par M. le Controleur de 1^''^ Classe de 
I'Administration de TArmee, Boulan- 
ger, agissant, sous reserve de I'Appro- 
bation des Ministres interesses, d'autre 
part. 

Considerations generales. 

Etant donne qu'entre le 6 Avril 1917 
et le 20 Aout 1919, (periode denoramee 



166 



UNITED STATES LIQUIDATION COMMISSION. 



August, 1919 (hereinafter designated 
"War period") tlie War Department 
of tlie United States of America and 
tlie American Expeditionary Forces on 
tlie one part (Iiereinafter called " War 
Department") and the Republic of 
France, on the other part, had numer- 
ous transactions between each other 
connected with or incidental to the 
conduct of the wai- in the prosecution 
of which the parties were associated ; 
and 

Whereas America, for said War De- 
partment, and Prance desire, with re- 
spect to such of the said transactions 
as occurred in Europe, to make full, 
final and complete settlement of all 
bills, accounts, claims, obligations, de- 
mands, rights and causes of action of 
every nature whatsoever, whether 
growing out of the delivery of or con- 
tract for the delivery of material, sup- 
plies or equipment or for services ren- 
dered, or contracted to be rendered, 
or for the occupation and use of 
all public properties of France of the 
domain of the State and all damages 
thereto, initiated or otherwise aris- 
ing or accruing during the said war 
period, said settlement to he herein- 
after designated as a " European set- 
tlement " ; and 



Wlicreas the said European settle- 
ment " relates wholly and solely to the 
transactions concerning which the pro- 
cedure was established by mutual 
agreements by the following instruc- 
tions : 

Instruction No. 4 of .January 17, 
1918, of the Office General des Rela- 
tions Franco-Americaines ; 

Instruction No. 4 bis of October 28, 
1918, of the Commi.ssariat General des 
Affaires de Guerre Franco-Ameri- 
caines ; 

Instruction No. 1.5 of October 2, 
1918, issued by the Commissariat Gen- 
eral des Aftaires de Guerre Franco- 
Americaines ; 

Copy of these instructions are an- 
nexed hereto and marked for identi- 
fication Exhibit A. 



ci-apres " I'eriode de (4uerre"), le De- 
partement de la (Juerre des Etats-Unis 
d'Amerique ainsi que les Foi'ces Ex- 
peditionnaires Americaines (denonunes 
ci-apres " Departement de la Guerre") 
d'uue part, et la Republique Francaise, 
d'autre part, out eu entre eux de nom- 
breuses transactions liees plus ou 
moins incidentment a la conduite de la 
Guerre pour la poursuite de laquelle 
les deux parties s'etaient associees ; 

Etant donne que I'Amerique. pour le 
dit Departement de la (Juerre, et la 
France desirent etablir nn reglement 
entier, definitif et complet. en raisou 
(les transactions meutionnees ci-apres 
qui .se sont poursuivies en Europe, de 
toutes les factures, comptes, reclama- 
tions, obligations, demandes. droits et 
motifs d'actions de quelque nature que 
ce soit, qui proviennent de la livraison 
ou (le contra ts pour la livraison du ma- 
teriel. approvisi(Junements ou equipe- 
ments, ou pour services rendus ou de- 
vant etre rendus suivant contrat, ou 
pour I'occupation et usage de toutes les 
]>roprietes publiques de la France du 
I)oniaine de I'Etat et tons dommages 
qui ]»ourraient y avoir ete faits, ou 
engendres d'une autre maniere, surve- 
nant ou s'nugmentant pendant la dite 
l)erio(le de (Juerre. le dit reglement 
devant etre ci-aiu-es designe sous le 
nom de " Reglement Europeen." 

Etant entendu que le dit " Regle- 
ment Europeen " s'etend en totalite et 
uniquement aux transactions dont la 
procedure a ete etablie d'un commun 
accord par les instructions ci-apres: 

Xo. 4. (hi IT .Janvier 1918 de rOffice 
General des Relations Franco-Ameri- 
caines : 

No. 4 bis du 28 Oetobre 1918. du 
Connnissariat General des Affaires de 
Guerre Franco-Americaines ; 

No. l."i du 2 <)ctol)re 1918, due Com- 
missariat General des Affaires de 
Guerre Franco-Americaines ; 

r)esquel!es instructions un exem- 
plaire est annexe au present contrat 
(annexe C). 



UNITED STATES LIQUIDATION" COMMISSION. 



167 



Now, therefore, in consideration of 
the premises and for the other con- 
siderations herein stated, it is mutually 
agreed between the parties hereto as 
follows : 

Article I. The total of all amounts 
to the credit of France against the 
said War Department a^gre^ates one 
billion nine hundred tifty-seven million 
seven hundred fifty-nine thousand one 
hundred and thirteen francs forty-one 
centimes (frs. 1,957,759,118.41) plus 
five million four hundred twenty-two 
thousand seven hundred and six and 
15/100 ($5,422,706.15) dollars. 

Article II. The total of all amounts 
to the credit of America for the said 
War Department against France ag- 
gregates four hundred and sixty-nine 
million one hundred and forty thousand 
and eighty-five francs eighty-nine cen- 
times (frs. 469,140,085.89), plus twenty- 
one million eight hundred fifty-nine 
thousand six hundred sixty and 20/100 
($21,8.59,660.20) dollars. 

Article III. All bills, accounts, 
claims, obligations, and demands of 
every nature whatsoever in respect of 
the aforesaid transactions between the 
said War Department on the one part 
and the Republic of France on the other 
part, which said transactions arose or 
accrued in Europe prior to August 20, 
1919, and which are not embraced in 
this European settlement, shall be for- 
ever barred and shall not be asserted 
by one of the p;\rties hereto against 
the other. 



Article IV. It is further agreed be- 
tween the parties hereto as follows: 

(«) In this European .settlement 
America has agreed to transfer and 
pay to France, in specie, the sum of 
0,986,.500.43 Swiss francs now on de- 
posit at Berne, Switzerland, to the 
credit of the financial requisition offi- 
cer. American forces in France, in con- 
sideration for which France has 
agreed to give and has given America 
credit in French francs at an exchange 



En consequence, etant donne ce qui 
precede et etant donne les autres con- 
siderations ci-incluses. 11 est decide d'un 
commun accord ce qui suit entre les 
dites parties : 

Article I. Le montant total des cre- 
ances de la France sur le dit Departe- 
ment de (Uierre {\k^ii Etats-Unis se 
montent a un millard neuf cents cin- 
quante sept millions sept cent cin- 
(}uante neuf mille cent treize francs et 
quarante et un centimes (frs. 1.957,- 
7.59,11.3.41 plus cinq millions (juatre 
cent vingt-deux mille sept cent six dol- 
lars et quinze cents (.$5,422,706.15). 

Article II. Le montant total des 
creances de I'Amerique pour le dit 
Departeiuent de la Guerre sur la 
France se montent a quatre soixante- 
neuf millions cent quarante mille 
quatre-vingt cinq francs et quatre- 
vingt neuf centimes (frs. 469,140.- 
085.89) plus vingt et un millions huit 
cent cinquante neuf mille six cent 
soixante dollars et vingt cents ($21,- 
859,660.20). 

Article III. Toutes les factures, 
comptes. reclamations et demandes, de 
quelque nature que ce soit, en ce qui 
concerne les transactions mention- 
uees ci-dessus enti'e le dit Departe- 
iuent de la Guerre <les Etats-Unis, et 
!a Kepublique Francaise et afferentesa 
des livraisons effectuees ou a des serv- 
ices rendus en Europe anterieurement 
an 20 Aout 1919 et qui ne sont pas 
centenues dans ce "Reglement Euro- 
peen" seront considerees comme fore- 
closes definitivement et ne pourront 
plus etre representees par Tune des 
parties contre I'autre. 

Article IY. En autre il est convenu 
ce qui suit entre les parties : 

( a ) Dans ce " Reglement Euro- 
peen." TAmerique a convenu de trans- 
ferer et de payer a la France, en 
especes. la somme de six millions 
neuf cent quatre vingt six mille cinq 
cents francs suisses quarante-trois 
(6.986..500.43) deposse maintenant a 
Berne (Suisse) an credit du "Finan- 
cial Requisition Officer " des Forces 
Americaines en France, pour lequel la 



168 



UNITED STATES LIQUIDATION COMMISSION. 



value of 1.1625; that is to say, in the 
sum of 8,121,806.75 French francs. 



France has agreed and does hereby 
agree that in the event the bahance in 
the general settlement now being nego- 
tiated between France and America 
should be in favor of America, then 
in such event the said sum of 8,- 
121.806.75 French francs will be 
jH-omptly repaid to America in cash. 

{bf< America heretofore seized, as a 
prize of war, 2.614.30 metric tons of 
coal and thereafter delivered same to 
France, charging same against France 
in the coal exchange account in the 
sum of fifty-four thousand seven hun- 
dred fifty-three dollars ten cents ($54,- 
7.53.10). A question has arisen as to 
whether or not this coal was enemy 
war material, and this question has 
been referred to the Franco-Beige 
Commission de Recuperation. Should 
this commission decide that said coal 
was not enemy war material, then in 
such event America agrees to pay 
France the amount charged for the 
said coal, namely, $54,753.10. 



(c) Certain aircraft material of the 
value of sixty-four thousand four hun- 
dred eighteen francs nine centimes 
ifrs. 64,418.09) furnished by the 
" Tardieu Mission " of the French 
Government to the said War Depart- 
ment has been by the said War De- 
partment returned to the French Com- 
mission and is now held by it in 
America as the property of the French 
Government. Without obligating it- 
self to purchase same, America agrees 
to cause an investigation to be 
promptly made and if it finds it can 
use the said material to advantage, it 
will take delivery of and pay for same 
at a price to be fixed by agreement be- 
tween the two Governments. 



France a accepte de donner et a ouvert 
a I'Amerique un credit en francs fran- 
caise au taux du change de 1.1625 
d'est-a-flre un montant de huit millions 
cent vingt et un milJe huit cent six 
francs francais soixante quinze, 
(8,121,806.75). 

La France a accepte et accepte par la 
presente, dans le cas ou la balance du 
reglement general en cours de negocia- 
tion entre la P^rance et I'Amerique se- 
rait en favour de I'Amerique, que, 
diiiis ce cas. lu dite somme de 
8,121,806.75 francs francais serait rem- 
boursees sans delai a I'Amerique en 
especes. 

(h) I'Amerique a saisi comme prises 
de guerre, 2.614.300 tonnes metriques 
de charbon, qu'elle a, par la suite, de- 
livrees a la France.' Ce charbon a ete 
porte au debit de la France dans le 
eompte d'echange des charbons pour 
la somme de cinquante quatre mille 
sept cent cinquante trois dollars dix 
cents (.$54,753.10). Une question s'est 
elevee sur le point de savoir si ce 
chai-bon etait ou non du materiel en- 
nemi de guerre et cette question a ete 
soumise a la Commission de Recupera- 
tion Fi-anco-Belge. Si la Commission 
decidait que le dit charbon n'etait pas 
du materiel ennemi de guerre, dans ce 
cas I'Amerique accepterait de payer a 
la France la somme qui lui a ete debi- 
tee pour ce charbon, c'est-a-dire : 
54,753.10 dollars. 

(c) Un certain nombre de materiel 
d'aviation d'une valeur de soixante 
quatre mille quatre cent dix huit frs. 
neuf (frs. 64,418.09), foui-ni par la 
Mission Tardieu du Gouvernement 
Francais au dit Departement de la 
Guerre, a ete rendu par ce dit Departe- 
ment de la Guerre a la Mission Fran- 
eaise et est maintenant garde par 
cette derniere en Amerique comme pro- 
priete du Gouvernement Francais. 
Sans prendre I'obligation de acheter 
ce materiel, I'Amerique accept de pro- 
voquer sans delai des etudes dans le 
but de savoir si ce matgriel peut etre 
utilis^e avantageusement par elle et 
dans ce cas elle en prendra possession 
et elle la paiera a un prix a etablir 



UNITED STATES LIQUIDATION COMMISSION. 



169 



(f?) Under the contract entered into 
between America and France dated 
August 28, 1919, dealing with artillery 
and ammunition. France agreed to 
supply America with materials as fol- 
lows : 

1. 944 75-ni/m gun materials, model 
1897, with limbers. 

2. 700 155-m/m howitzer materials, 
model 1917. Schneider design, with 
limbers. 

3. 198 155-m/ni G. P. F. materials, 
with limbers. 

4. Collection of additional parts, as 
in said contract more specifically de- 
scrilied. 

The amount due by America under 
the terms of the said contract of Au- 
gust 28. 1919, has been taken into ac- 
count in computing the amounts to the 
credit of France mentioned in Article 
I hereof The delivery of materials 
which France contracted to deliver 
under the terms of said contract has 
not yet been completed, and nothing 
herein contained shall release France 
from its obligation to promptly com- 
plete such deliveries. 

In witness whereof on the day and 
year first above^written, this contract 
has been executed in four parts, each 
having the full force and effect of an 
original, by the United States of 
America, acting through the United 
States Liquidation Commission — War 
Department, Edwin B. Parker, chair- 
man, of the one part, and by the Re- 
public of France, acting through the 
Controleur de I'Administration da 
I'Armee, Edouard Boulanger, acting 
under reserve of the approval of the 
interested ministers, of the other part. 

United States of America. 
By Edwin B. Pakkek, 

Chairman, United States 
Liquidation Commission — 
War Department. 
Republic of France, 
By L. Boulanger, 
Controleur de l' Administration 
de I'Armee. 



apres entente entre les deux Gouverne- 
ments. 

id) Aux termes du contrat etabli 
entre I'Amerique et la France, en daie 
du 28 Aout 1919, au sujet de I'Artil- 
lerie et des Munitions, la France s'est 
engagee a fournir a I'Amerique les ma- 
teriels suivantes : 

1. 944 materiel de 75, modele 1897 
avec avant-train. 

2. 700 materiel de 155 court, modele 
1917 Schneider avec avant-train. 

3. 198 materiel de 155 G. P. F. avec 
avant-train. 

4. Collections de pieces de rechange 
comme il est indique en detail dans le 
contrat susviee. 

La somme due par I'Amerique aux 
termes du dit Contrat du 2.8 Aout 1919 
a ete incluse dans I'etablissement an 
montant du credit de la France fi- 
gurant a I'Article I ci-dessus. Les ma- 
teriels que la France s'est engagee a 
fournir aux termes du dit Contrat n'ont 
pas encore ete fournis entierement ; il 
est entendue que le present contrat 
n'a pas pour effet de decharger la 
France de son obligation de satisfaire 
rapidement a ces cessions. 

En foi de quoi, le jour et I'annee 
precites, le present contrat a ete redige 
en quatre exemplaires, chacun d'eux 
ayant la meme valeur et effet qu'un 
original, par les Etats-Unis d'Amerique, 
representes par la Commission de 
Liquidation des Etats-Unis, Departe- 
ment de la Guerre, Edwin B. Parker, 
president, d'une part, et par la Re- 
publique Francaise, representee par M. 
le Controleur de lere Classe de I'Ad- 
ministration de I'Armee Boulanger, 
agissant sous reserve de 1' approbation 
des Ministres interesses, d'autre part. 
Etats-Unis D'Amerique, 

Par Edwin B. Parker, 
President, Commission de Liquidation 

des Etats-Unis, Department de la 

Ouerre. 

Republique Francaise, 
Par L. Boulanger, 
Controleur de V Administration de 

VArmee. 



170 



UNITED STATES LIQUIDATION COMMISSION. 






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172 



Ui^ITED STATES LIQUIDATION COMMISSION. 



APPENDIX XXXII. 



C0:vTRACT FOR THE (JENERAL SETTTJ-:M 

America and Republic of 

This i-ontract, entered into this 25tli 
(lay of November, A. D. 1919, by and 
between the United States of America 
(hereinafter called "America") act- 
ing through the United States Liquida- 
tion Commission — War Department, 
P'dwin B. Parker, chairman, on the one 
part, and the Republic of France (here- 
inafter called "France"), acting 
through le Sous-Secretaire d'Etat aux 
Finances, Paul Morel, on the other part, 
witnesseth : 

That irheieiis, between the 6th day 
of April, 1917, and the 20th day of 
August, 1919 (hereinafter designated 
"War period"), the War Department 
of the United States of America and 
the American Expeditionary Forces, 
on the one part (hereinafter called 
"War Department") and the Republic 
of France, on the other part, had nu- 
merous transactions between each other 
connected with or incidental to the 
conduct of the war in the prosecution 
of which the parties were associated ; 
and 

Whereas America, for the said War 
Department, and France desire to make 
a full, final, and complete settlement 
in respect to the transactions afore- 
said of all bills, accounts, claims, obli- 
gations, demands, rights, and causes of 
action of every nature whatsoever, 
whether growing out of the delivery 
of or contracts for the delivery of ma- 
terial, supplies, or equipment, or for 
services rendered or contracted to be 
rendered, or for the occupation and 
use of all public properties of France 
and all damages thereto, initiated or 
otherwise arising or accruing during 
the said war period, said settlement to 
be hereinafter designated as " General 
settlement " ; and 



M'hercas the parties hereto, in ar- 
riving at such general settlement, have 



ent Between the United States of 
France, Noveaiber 25, 1919. 

fe contrat redige le 25 Novembre 
1919 a ete etabli par et entre le Gou- 
vernement des Etats-Unis (appele ci- 
apres Amerique) represente par la 
(^'ommission de Liquidation des Etats- 
Unis du Deiiartement de la Guerre, 
Edwin B. I'arker, President, d'une 
part; et la Republique Fningaise (ap- 
pelee ci-apres France) representee par 
M. le SdUs-Secretaii-e d'Etat aux Fi- 
nances, I'aul Morel, d'autre part; 

Etant donne qu'entre le 6 Avril 1917 
et le 20 Aoiit 1919, (denomme ci-apres 
"Periode de Guerre"), le Departement 
de la Guerre des Etats-Unis d'Ameri- 
(jue, ainsi que les Forces Expedition- 
naires Aniericaines (denommes ci- 
apres "Departement de hi Guerre") 
d'une part,et la Republique Frangaise, 
d'autre part, ont eu entre eux de nom- 
breuses transactions iiees plus ou moins 
incidenrment a la conduite de la Guerre 
pour la poursuite de laquelle les deux 
parties s'etaient associees ; et 

Etant donne que 1" Amerique, pour le 
dit Departement de la Guerre, et la 
P'rance deslrent etablir un reglemeut 
entier, delinitif et complet, en raison 
des transactions mentionnees ci-dessus, 
de toutes les factures, comptes, recla- 
mations, ol)ligations, demandes, droits 
et motifs d'actions de quelle que na- 
ture que ce solt, qui proviennent de la 
livraison ou de contrats pour la livrai- 
son du materiel, approvisionnements ou 
equipements, ou pour services rendus 
on devant etre rendus suivant contrat, 
tai pour I'occupation et I'usage de 
toutes les proprietes publiques du do- 
maine de I'Etat Frangais et tons 
dommages qui pourraient y avoir ete 
faits ou engendres, ou d'une autre 
maniere s'elevant ou s'accumulaut 
pendant la d'ite Periode de Guerre, le 
dit reglement devant etre designe sous 
le nom de "Reglement General" ; et 

Etant donne que les parties ci-dessus 
designees en arrivant k ce reglement 



UNITED STATES LIQUIDATIOJST COMMISSION. 



17; 



agreed that in respect to the trans- 
actions aforesaid the total of all franc 
credits due each party shows a net 
balance due France of one billion four 
hundred eighty -eight million six hun- 
dred nineteen thousand and twenty- 
seven francs and tifty-two centimes 
(frs. 1,488,619,027.52), and the total 
of all dollar credits due each party 
shows a net balance due America of one 
hundred seventy-seven million one 
hundred forty-nine thousand eight 
hundred and sixty-six and 86/100 
(.$177,149,866.86) dollars; 



Now, therefore, in consideration of 
(he premises and of the agreement on 
the part of America to pay France the 
said sum of one billion four hundred 
eighty-eight million six hundred and 
nineteen thousand and twenty-seven 
francs and fifty-two centimes (frs. 
l,4iSS,619,027.52) and the agreement on 
the part of France to pay America the 
said sum of one hundred seventy-seven 
million one hundred forty-nine thous- 
and eight hundred sixty-six and 86/100 
(. 1^177,149,866.86) dollars, it is mutu- 
;!lly agreed between the parties hereto 
as follows : 

Article I. The Republic of France 
does hereby fully, completely, and in 
all things, release and discharge the 
United States of America, and the 
United States of America does hereby 
fully, completely, and in all things, re- 
lease and discharge the Republic of 
France in respect of the transactions 
aforesaid, from all bills, accounts, 
claims, obligations, demands, rights, 
causes of action, suits, and contro- 
versies of every nature whatsoever 
which either party uow has against the 
other, or which may hereafter arise, 
whether hy reason of or in anywise 
incident to or growing out of the de- 
livery or contract for the delivery of 
materials, supplies or equipment, or 
for services rendered, or contracted to 
be rendered, or for the occupation and 
use of all public properties of France 
and all damages thereto or otherwise 



general ont decide qu'en raison des 
transactions designees plus haut la 
somme de tons les credits en Francs 
dus a chaque purtie tail ressortir tuie 
balance nette en faveur de la France 
de un milliard quatre cents quatre- 
vingt-huit million six cent dix-ueut 
mille vingt-sept francs et cinquante- 
deux centimes (frs. 1,488.619.027.52) 
et la somme de tons les credits en 
dollars dus a chaque partie fait res- 
sortir line balance nette en faveur de 
TAmerique de cent soixante-dix-sept 
million cent quarante-neuf mille liuit 
cent soixante-six dollars et quatre- 
vingt-six cents (dollars 177,149.866.86) ; 

En consequence, etant donne ce qtii 
precede, et etant donne Tacceptation de 
la part de I'Amerique tie payer a la 
France la dite somme de uu milliard 
quatre cents quatre-vingt-huit million 
six cent dix-neuf mille, vingt-sept 
francs et cinqtiante-detix centimes (frs. 
1.488,619.027.52) et Facceptation de la 
France de payer a rAmeritiue la dite 
sonnne de cent soixante-tlix-sept mil- 
lion cent quarante-neuf mille huit cent 
soixante-six dollars et quatre-vingt-six 
cents (dollars 177.149,866.86), il est 
decide d'un commun accord ce qtii suit 
entre les dites parties : 

Article I. Par ces presentes, la Re- 
publique Francaise libere et decharge 
tout a fait, completemeut et en toutes 
manieres les Etats-Unis d'Amerique et 
les Etats-Unis d'Amerique liberent, de- 
cliargent tout -a fait, completemeut et 
en toutes manieres la Republique Fran- 
caise, en raison des transactions men- 
tionnees ci-dessus. de toutes les fac- 
tures, comptes, reclamations, obliga- 
tions, demandes, droits, motifs d'ac- 
tinns. poursuites et controverses de 
toute nature, aussi bien ceux que I'une 
et I'autre partie a I'heure actuelle a 
faire valoir I'une contre I'autre, que 
ceux qui pen vent s'elever par la suite 
soit en raison de, soit touchant de 
quelle que maniere que ce soit a, soit 
provenaut de la livraison on de con- 
trats pour la livraison de materiel, ap- 
provisionnements on equipements, ou 
pour services rendus ou devant etre 



174 



UNITED STATES LIQUIDATION COMMISSION. 



initiated, arising or aociuing during 
the said war period between rlie said 
War Department on the one part and 
the Kepublic of France im the other 
part. 



Article II. Nothing hereinbefore 
contained shall be held or construed to 
in anywise annul, alter, modify, or 
affect the obligations of P^rance held 
by America or the obligations of either 
party hereto arising out of the follow 
ing special contracts or agreements 
namely : 

(«) The contract between Americn 
and France, dated August 1st, 1919," 
whereby America sold and France pur- 
chased certain properties therein re- 
ferred to, France agreeing t(» pay 
therefor the sum of four hundred mil- 
lion (.$400,000,000) dollars with inter- 
est thereon, at the time and under the 
terms mentioned therein ; 



(h) The contract between America 
and France for the settlement of rail- 
road transportation and other claims, 
dated October 1st, 1919, in which 
America agrees to pay France the sum 
of four hundred thirty-four million nine 
hundred eighty-five thousand three hun- 
dred eight-nine and 73/100 (frs. 434.- 
98."5,389.T3) francs; 

(c) The contract between America 
and France for the settlement of all 
port dues and similar claims, dated 
October 1st, 1919, in which America 
agrees to pay France the sum of three 
million (frs. 3.000.000) francs; 

{(I) All contracts, agreements or ar- 
rangements entered into between Amer- 
ica and France for or in connection 
with sales made by America to France 
in tlie United States since November 
11th, 1918. 



rendus par suite tie contrats ou pour 
Foccupatiou et I'usage de toutes pro- 
pri^tes publiques du domaine de I'Etat 
Fraucaise et tons dommages qui pour- 
raient y avuir ete faits ou eugendres 
ou d'une autre nmni^re s'elevant ou 
s'accumulant durant la dite I'eriode 
de Guerre entre le dit Departement de 
la (iuerre d'une part, et la Kepuldique 
Fraucaise d'autre part. 

Article II. Rien de ce tpii est cou- 
tenu ci-dessus ne doit etre retenu ou 
interpi-ete de facon a annuler, alterer 
ou nioditier ou affecter en quelle que 
maniere que ce soit les obligations de 
la France envers I'Amerique ou les 
(tbligations de Tune et I'autre partie ci- 
contre provenant des contrats ou ac- 
cords speciaux ((ui suivent, a savoir : 

(a) Le Contrat entre I'Amerique et la 
France, en date ilu I'"" Aout 1919, par 
lequel I'Amerique a vendu et la France 
a achete certaines proprietes aux- 
quelles il est fait allusion dans le Con- 
trat en question, la France consentant 
a payer par la meme la somme de 
quatre cents millions de dollars avec 
I'interet a I'epoque et sous les condi- 
tions mentionnes dans le Contrat en 
question. 

ft) Le Contrat entre I'Amerique et la 
France pour le reglement des trans- 
ports par chemin de fer et d'autres 
reclamations, en date du l'' Octobre 
1919, par lequel I'Amerique consent a 
payer a la France la somme de quatre 
cent trente quatre millions neuf cent 
quatre-vingt cinq mille trois cent 
<niatre-vingt neuf francs et 73 centimes 
(434,985,389.73) frs. 

c) Le Contrat entre I'Anierique et la 
France pour le reglement de toutes les 
taxes de peage et des reclamations de 
meme nature, en date du 1"'' Octobre 
1919. par lequel I'Amerique consent a 
payer h la France la somme de trois 
millions de francs (3,000,000.00) frs. 

(}) Tons contrats, accords ou ententes 
passes entre rAmerique et la France 
pour ou relativement a des ventes 
faites par I'Amerique a la France aux 
Etats-Unis deiaiis le 11 Novembre 
1918. 



UNITED STATES LIQUIDATION COMMISSION. 



175 



Article III. This contract shall not 
operate as a release or nioditicution of 
or in any wise alTect whatever claim 
France may now have against America 
ufiiwing out of services rendered by 
France to America during the war 
jieriod in C(mnection with the ocean 
Transii<ii-t;ition of American troojis. 



Article IV. This contract shall not 
be construed to relate to or in any wise 
aflfect claims or demands howsoever 
arising between the nationals of either 
country, on the one part, and the 
parties hereto, or either of them, or 
their nationals, on the other part. 
Neither shall it in any wise atfect 
transactions pertaining to any depart- 
ment or departments, agency or agen- 
cies of the Government of the United 
States of America other than the said 
War Department and all of the agen- 
cies of the said AVar Department and 
the American Army and all of its 
branches and agencies. 



In witness whereof, on the day and 
year lirst above written, this contract 
has been executed in four parts, each 
having the full force and effect of an 
original, by the United States of Amer- 
ica, acting through the United States 
Liquidation Connnission — War Depart- 
ment, Edwin B. Parker, chairman, and 
by the Republic of France, acting 
through le Sous-Secretaire d'Etat aux 
Finances, Paul Morel. 

United States of America, 
By Edwin B, Parker, 
Chaiiiiian, rnited States Liquidation 
Coin in ission — Mn r Depo rtinent. 

IvEPUBLic OF France, 
By P. Morel, 
Lc Sous-Secretairr d'Etat aux Finan- 
ces. 



Article III. Ce Contrat n'aura pas 
pouvoir d'annuler, moditier ou affecter 
de quelle que nianieve que ce soit toutes 
reclamations que la France pourrait 
avoir 3, I'heure actuelle a faire valoir 
contre I'Amerique et provenant des 
services rendus par la France eI I'Aine- 
rique pendant la Periode de Guerre et 
ayant trait aux transports des troupes 
ainericaines sur I'Ocean. 

Article IV. Ce Contrat ne doit etre 
interprete comme se rapportant d'une 
maniere quelconque ou aftectaut de 
(|uelle que maniere que ce soit les I'e- 
claniations ou demandes de toute 
nature, s'elevant entre les nationaux 
de I'un et I'autre Pays, d'une part, et 
les parties ci-incluses ou I'une d'elles, 
ou leurs Nationaux, d'autre part. Ce 
Contrat concerne uniquement le De- 
partement de la Guerre et toutes les 
Agences du dit Departement de la 
Guerre, I'Armee Americane et toutes ses 
branches et Agences, mais ne concerne 
nul lenient un autre ou plusieurs autres 
Departements du Gouveriiement des 
Etats-Unis d'Am^rique ainsi que leur 
Agence et leurs Agences. 

En foi de quoi, le jour et I'annee au 
debut precites, ce Contrat a ete redige 
en quatre exemplaires, cliacun d'eux 
ayant la meme valeur et effet qu'un 
original, par les Etats-Unis d'Ameri- 
que, representes par la Commission de 
Liquidation des Etats-Unis, Departe- 
ment de la Guerre, Edwin B. Parker, 
President, et par la Republique Fran- 
caise, representee par M. le Sous-Se- 
ci-etaire d'Etat aux Finances, Paul 
Morel. 

Etats-Unis d'Amerique, 
Par Edwin B. Parker, 

President, Commission de 

Liquidation des Etats-Unis — 

Departmeiht de la Guerre. 

Republique Francaise, 

Par P. Morel. 

^ous-Secretaire d'Etat aur Einancrs. 



176 



UNITED STATES LIQUIDATION COMMISSION". 



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179 



APPENDIX XXXIII. 

French Contract of Indemmty for Torts, Workmen's Compensation, Rents, 

AND Requisitions. 



This coHtract, entered into this first 
day of December, A. D. 1919, by and 
between the United States of America 
(hereinafter called "America"), act- 
ing through the United States Liquida- 
tion ('omniission — War Department, 
Edwin B. Parker, eliairman, of the one 
part, and the Republic of France 
( hereinafter called " France " ) , acting 
through Edouard Ignace, le Sous-Sec- 
letaire d'Etat de la Justice Militaire 
au Minist^re de la Guerre, of the other 
I)art, witnesseth : 

That irliereas, between the 6th day 
of April, 1917, and the 31st day of 
December, 1919 (hereinafter desig- 
nated "War period"') the War De- 
partment of the United States and 
members of its military forces, in- 
cluding the American Expeditionary 
F<jrces and the American Forces 
in France (all hereinafter referred to 
as "American Military Forces") 
have, as incidental to or as connected 
with the conduct of the war in the 
prosecution of which the parties here- 
to were associated, occupied and used 
real property, appropriated and used 
personal property, damaged real and 
personal property, and damaged indi- 
viduals resulting in their injury or 
death ; all of which said occupancies, 
appropriations, uses, and damages oc- 
curred or shall occur in France during 
the said War period ; and 



H7(c/-er/.s America has maintaine<l 
representatives in France for more 
than a year after the signing of the 
Armistice for the purpose of receiving 
Investigatint;'. and settling all claims 
hied or lodged against it; and 

Wherea.s. the work of these repre- 
.sentatives has been practically com- 
pleted in so far as the receipt, inves- 
tigation, anfl consideration of all such 
claims is concerned; and 



Ce contrat redige le 1""" Decembre 1919 
a et6 gtabli par et entre le Gouverne- 
ment des Etats-Unis (appele ci-apres 
" Amerique " ) represents par la Com- 
mission de Liquidation des Etats-Unis 
du Dgpartement de la Guerre, Edwin 
B. Parker, president, d'une part ; et la 
Republique Francaise, (appelSe ci-^ 
apres " France " ) representee par M. 
Edouard Ignace, Sous - Secretaire 
d'Etat de la Justice Militaire au Mi- 
nistere de la Guerre, d'autre part ; 

Etant donne qu'entre le 6 Avril 1917 
et le 31 Decembre 1919 (denomme ci- 
apres " PSriode de Guerre " ) le D^ 
partement de la Guerre des Etats-Unis 
I'Amerique et le personnel faisant 
partie de ses Forces Militaires, y com- 
pris les Forces Expgditionnaires Ame- 
ricaines et les Forces Americaines en 
France (tous ci-apres designSs sous le 
nom de " Forces Militaires Ameri- 
caines") ont, d'une facon plus ou 
moins directement liSs a la conduite 
de la guerre, pour la poursuite de la- 
quelle les deux parties s'^taient asso- 
ci§es, occupe et utilise des immeubles, 
se sont approprie et ont utilise des 
biens niobiliers, ont deteriore des im- 
meubles et des biens mobiliers et ont 
porte prejudice k des individus en leur 
causant soit des blessnres. soit la 
mort ; et etant donne que tous les dits 
occupations, appropriations, utilisa- 
tions et dominages ont' eus lieu ou 
auront lieu en France pendant la dite 
periode de Guerre ; et 

Etant donne que I'Amerique a main- 
tenu des representants en France 
pendant plus d'une annee apres la 
signature de I'Armistice dans le but de 
recevoir, d'enqueter et de regler toutes 
les reclamations presentees ou deposees 
contre elle ; et 

Etant donne que le travail de ces 
i-epi-esentants a ete pratiquement com- 
plete autant que la reception. I'enquete 
et toutes considerations relatives a ces 
reclamations I'ont permis ; et 



180 



(JNITED STATES LIQUIDATION" COMMISSION. 



Whereas P^rauee has agreed, for the 
(L'ousideratioiis herein set forth, to 
substitute itself for America in refer- 
ence to, and guarantees the latter 
^a^gauist, all unsettled claims, and also 
those concerning which offers of set- 
tlement have not been accepted, aris- 
ing or accruing during the War period, 
save those specificallj- excepted in 
Article II hereof; 

Now, therefore, in consideration of 
the premises, it is mutually agreed be- 
tween the parties hereto as follows : 

Article I. France herel).v substitutes 
itself for America in reference to, and 
guarantees the latter against, all 
claims, demands, obligations, rights, 
actions, suits, and controversies of 
every nature, arising in France during 
the said war period, which any inhabi- 
tant or any person subject to the sov- 
ereignty of France, or any organiza- 
tion, association or corporation, com- 
mune or department of France may 
now have or which may hereafter ac- 
crue, for damage to, use or loss of 
property, or injuries to or death of 
persons, caused by or resulting from 
acts or omissions of members of the 
American IMilitary Forces, or of any 
one connected therewith (not includ- 
ing members of the American welfare 
organizations) during the said war 
period, particularly the following : 

(a) All claims which America is 
authorized to pay to the inhabitants of 
France under an act of America's Con- 
gress approved April 18, 1918, entitled 
"An act to give indenmity for damages 
idealised by American forces abroad." 

{})) All claims, whether caused by 
acts or omissions of members of the 
American Military Forces, or any 
other persons, arising from injury to 
or death of civilian employees and la- 
borers of America, excepting claims of 
the nationals of America (workmen's 
compensation cases). 

(r) All claims for the occupation 
and use of real property, damages 



Etant donne que la France a con- 
sent! pour les considerations men- 
tionnees ci-dessous a se substituer et 
par suite k garantir TAmerique contre 
toutes reclamations non reglees ou dont 
les oft'res de reglement u'auront pas 
ete acceptees. s'elevant ou s'accumu- 
lant durant la periode de Guerre, a 
I'exception de eel les nientionees il 
I'Article II suivant ; 

En consequence, etant donne ce qui 
precede, il est decide d'un commun ac- 
cord ce qui suit entre les dites par- 
ties. 

Article I. La E'rance .se substitue 
par les presentes a I'Amerique et la 
garantit contre toutes reclamations, 
demandes. obligations, droits, actions, 
poursuites et controverses de toute 
nature eleves en France pendant la 
dite periode de Guerre, que tout habi- 
tant ou tout ressortissant Frangais ou 
toute autre personne morale, connnune 
on departement de France peut encore 
avoir a presenter ou qui pourrait par 
la suite etre presente pour dommages, 
usage ou perte de biens ; ou donunages 
aux personnes par suite de ))lessures 
ou deces causes par, on resultant, 
d'actes ou negligences des Membres des 
Forces Militaires Americaines ou qui- 
conque y a ete rattache (a I'exclusion 
(les ]\Ieml)res des CEuvres de Bien- 
faisance Americaines) pendant la dite 
periode de Guerre, c'est k dire: 

(a) Toutes reclamations que I'Ame- 
riqiie est autorises a payer aux habi- 
tants de France \)nr TActe du C'ongres 
Americain approuve le 18 Avril 1918 
et intitule "Acte pour douner une in- 
denmite pour dommages causes par les 
Forces Americaines ji I'Exterieur.'" 

(b) Toutes reclamations qu'elles 
previennent d'acte ou de negligence des 
Membres des Forces Mllitaire-s. Ameri- 
caines ou toute autre personne et ayant 
pour causes les blessures ou la mort 
occasionges a des employes et ouvriers 
civils de I'Armee Americaine a I'excep- 
tion des reclamatitms des nationaux 
Americains (Accidents du Travail). 

(c) Toutes reclamations pour occu- 
pation et usage de biens immobiliers, 



UNITED STATES LIQUIDATION COMMISSION. 



181 



tliereto, and restoration expenses, re- 
sulting;- from the oocuparion in any 
manner whatsoever of said real prop- 
erty by the American IMilitary Forces. 
( (J ) All claims resulting from requi- 
sitions, formal or informal, for the 
appi'opriations. use, damage, or de- 
struction of personal pr^iierty. 

Article II. It i-s e.vijresuJij under- 
■■<too(l ami agreed, Iioicever, that the 
following claims are excepted from the 
operation of this agreement, and that 
France does not assume or agree to 
pay -the following : 

(a) All claims against America aris- 
ing from lireach of contracts for the 
manufacture or furnishing of supplies, 
materials, or equipments, or for the 
rendition of services ; except, however, 
all leases and contracts for the occupa- 
tion of property. 

( h ) All claims cognizable under the 
general Admiralty law, that is to say, 
claims by or against vessels of Amer- 
ica. 

Article III. America agrees to pay, 
in cash, the sum of twelve million (frs. 
12.000,000) francs (hereinafter desig- 
nated " Minimum payment "). If upon 
the 31st day of December, 1923, the 
aggregate of all payments made by 
France to claimants on account of the 
claims assumed by it exceeds said min- 
imum payment, then in such event 
America agrees, on demand, to then 
luiy to France such excess, provided, 
however, that such additional payment 
by America sliall in no event exceed 
the sum of six million (frs. 6,000,000) 
francs. 

Article IV. It is further agreed that 
the 12,000.CHX) francs mentioned in Art. 
Ill hereof as the minimum payment 
will be added to the indebtedness in 
francs which America has acknowl- 
edged as due to France by contract 
dated November 25th, 1919. The 
method of payment of said 12,000,000 
francs will be arranged at the same 
time a'; the method of payment of the 
sums mentioned in said contract of No- 



dommages y relatifs et depenses de 
remise en etat quand 11 y a eu occupa- 
tion par les Forces Militaires Ameri- 
caines a quelque titre que ce soit. 

('/) Toutes reclamations pour re- 
quisitions ( i-egulieres on non ) pour ai> 
propriation, usage, degats ou destruc- 
tion (Us biens mobiliers. 

Article II. // est ed-presseiiient rt- 
coiniii et caiireiiK, eependant, que ley:- 
reclamations suivantes sont exceptees 
des clauses de ce contrat et que la 
France ne prend pas en charge et ne 
consent pas k payer ce qui suit ; 

('/) Toutes reclamations contre 
I'Amerique qui sont la consequence des 
ruptures de contrat pour la fabrication 
ou la fourniture d'approvisionnements, 
materiel ou equipement ou pour services 
rendus, et a I'exclusion des baux et 
contrats de location. 

(6) Toutes les reclamations qui 
tombent sous le coup de Loi Ge- 
nerale d'Amiraute, c'est a dire, les 
reclamations pour ou contre les vais- 
seaux de I'Amerique. 

Article III. L'Amerique, accepte de 
payer en especes, la soinme de douze 
millions fra«cs (frs. 12,000.000) (ci- 
apres designee comme "Paiement mini- 
mum"). Si le 31 Decembre 1923 le to- 
tal de tons les paiements afCectufe par 
la France aux reclamants sur les recla- 
mations prises en cUiarge par elle depas- 
sait le paiement minimum sus-indique, 
dans ce cas I'Amerique accepte de payer 
a la France sur sa demande les sommes 
eu excedent. Sous reserve, eependant, 
que ce paiement additionel fait par 
I'Amerique ne devra en aucun cas de- 
passer la somme de six millions francs 
(frs. 6.000.000). 

Article IV. II est de plus entendii 
que les douze millions de francs in- 
diques comme prix minimum dans I'Ar- 
ticle ci-dessus seront ajoutes a la 
dette en francs que I'Amerique a re- 
connu avoir contrate vis & vis de Ici 
France par le contrat du 25 Novembre 
1919. Le modalites de paiement de 
ces douze millions de francs seront 
done reglees en meme temps que les 
modalites de paiement des sommes in- 



182 



UNITED STATES LIQUIDATION COMMISSION. 



veinber 25rli, 1919. This method and 
the rate of exchauge for the con version 
of francs into dollars, and dollars into 
francs, will be made the sul)ject of an 
agreement to be entered into in the 
future, following- the negotiations 
which are now in progress on. this sub- 
ject l)etween the representatives of the 
two Go\erninents. 

Article V. America agrees to leave 
in France until December 31. 1923, ac- 
cessible at all times to the authorized 
representatives of France, all records, 
reports, and correspondence of every 
mature whatsoever pertaining to claims 
assumed by France hereunder, and 
claims of like nature which have here- 
tofore been settled and disposed of ))y 
America, for the use of France in con- 
sidering and dealing with all pending 
claims or claims that may hereafter be 
presented. 



In witness whereof, on the day and 
year first above written, this contract 
has been executed in four parts, each 
having the full force and effect of an 
original by the United States of 
America, acting through the United 
States Liquidation Commission — War 
Department, ]E'dwin B. Parker, chair- 
man, and by the Republic of France, 
acting through M. Edouard Ignace, le 
Sous-Secretaire d'Etat de la Justice 
iMilitaire an Ministere de la Guerre. 

United States of America, 
By Edwin B. Parker, 
Chairman, United States Liqiii>J(iti()>i 
Conimifsion — TT'or Deixiitiiient. 

Republic of E'rance. 
By Edouard Ignace, 
Sous-Secretaire d'Etat de la Justice 
itilitalrc au^IiniMerede la Guerre. 



diquees dans le Contrat du 2.1 du Novem- 
bre. ces niudalites et le taux du change 
pour la conversion des francs en dol- 
lar's et reciproquenient devant faire 
rol)jet (Tun accord ulterieur faisant 
suite aux nggociatinns (jui se poursui- 
vent a ce sujet entre ies representants 
des deux (Jouvernements. 

Article Y. I/Amerique accepte de 
laisser en France jusqu'au 31 Decem- 
bre 1923 a, la disposition fl tout mo- 
ment des representants autorises de 
la France toutes les archives, rapports 
et correspondances de toute nature re- 
latifs aux reclamations prises en 
charge par la France par les preseutes, 
et relatifs aux reclamations similaires 
qui ont ete jusqu'ici reglees par I'Amg- 
riqne, pour les besoins de la France 
a fin (.le considerer et regler toutes les 
reclamations maintenant en instance 
ou les reclamations qui pourraieut etre 
presentees posterieurement. 

En foi de quoi, le .iour et I'an au 
debut precites ce contrat a ete redige 
en quatre exemplaire, chacun d'eux 
ayant la meme valeur et effet qu'un 
original, par les Etats-Uni d'Am^ri- 
que, representes par lo Commission de 
Liquidation des Etats-Unis du D6- 
partement de la Guerre, Edwin B. 
Parker, President, et iiar la Repu- 
blique Francaise, representee par INT. 
Edouard Ignace, Sous-secretaire d'Etat 
de la .Justice :\Iilit:iire au ]\Iinistere de 
la Guerre. 

EtATS-UnLS D'AilERIQUE, 

Par Edwin B. Parker, 
Presidott, Coin mission dc Liquidation 
des Etats-I'nix. Department de la 
Guerre. 

Repc'klique Francaise. 
Par Edouard Ignace, 
Sous-Secretaire d'Etat de la Justice 
Ulilitairc au ilinistere de la Guerre. 



APPENDIX XXXIV. 

cuthell-brofferio agreement. 

This agreement, made and entered into this 13th day of August, A. D. 1919, 
by and between Comm. Gran Croce Federico Brofferio, Consigliere di Stat<\ 
and duly authorized representative of the under secretary of the treasury 



UNITED STATES LIQUIDATION COMMISSION. 183 

for the liquidation of the tirins and luuuitions and the aeronautical depart- 
ments, and duly authorized representative of the Interministerial Committee 
of the Royal Italian Government for the readjustment of tlie industries of 
the war, and Mr. Chester W. Cuthell, special representative of the Secretary 
of War of the United States of America, witnesseth : 

Whereas the War Department of the United States has requested that it 
be reimbursed by Italy for moneys paid out and indebtedness incurred by 
it in behalf of Italy botli under formal contracts for the delivery of war 
materials to Italy at cost and under informal arrangements made to supply 
such war materials needed by Italy in the prosecution of the war but not 
required after the armistice, the nature and amounts of such claims of the 
War Department being set forth in the letters addressed to Conmiandatore 
Brofferio by Mr. Cuthell, under date of April 26. 1919, and by JNIr. Ray, as- 
sistant to Mr. Cuthell, under date of July 11, 1919 ; and 

Whereas Commandatore Brofferio and Chester W. Cuthell, being charged 
by their respective Governments to determine the amounts due from Italy to 
the War Department of the United States and the settlement to be made 
therefor, in respect to the matters hereinafter set forth, have made the fol- 
lowing agreement for settlement and liquidation thereof : 

Noir. therefore, in consideration of the premises and of the importance of 
avoiding misunderstandings and delays in the adjustment of war-time trans- 
actions, the parties hereto, acting for and in behalf of their respective Gov- 
ernments and the departments thereof concerned with the transactions herein 
referred to, do agree as follows : 



The amounts due and payable by Italy to the War Department in respect 
to picric acid (not delivered), spruce and tir, and nitrocellulose powder are 
as follows : 

Picric acid $4, 000, 000 

Spruce and fir 1, 7(X>, 0(X) 

Nitrocellulose powder 250, 000 



5, 950, 000 
The War Department will make to Italy an allowance of seven hundred 
afty thousand dollars ($750,000.00) to be applied upon said sum of five million 
nine hundred fifty thousand dollars ($5,950,000.00), making the balance due 
thereon five million two hundred thousand dollars ($5,200,000.00). 

II- 

The War Department will waive and cancel its claims against Italy for four 
million thirty-eight thousand dollars ($4,038,000.00) for trinitrotoluol, for one 
iiiijlion three hundred twenty-three thousand dollars ($1,323,000.00) for Cotton 
linters. 

III. 

Italy hereby cancels and releases any and all claims arising from facts and 
involving principles similar to these upon which the claims above referred to 
are based which Italy has or may have against the War Department, includ- 
ing, among others, claims to be reimbursed for expenditures made for exten- 
sions of plants for tlie manufacture of airplanes, hydroplanes, automobiles, and 



184 UNITED STATES LIQUIDATION COMMISSION. 

other war materials in Italy, for losses sustained hy Italy upon raw materials 
accumulated for such manufacture, and for excess of actual costs of materials 
supplied to the War Dei)artment over the amounts for which such materials 
have been invoiced to the War Department. All pi'operty, equipment, raw 
materials, and finished products acquired by Italy in respect to the claims 
hereby waived by it shall be and remain the sole pi'operty of Italy. Com- 
mandatore Brofferio states that the claims hereby waived by Italy exceed one 
million dollars ($1,000,000.00) in amouiij:. iNIr. Ray states that he does not 
know f»f the existence of any claims of the War Department against Italy 
other than those set forth in this agreement which arise from facts or Involve 
principles similar to those upon which the claims referred to in this agreenient 
are based. 

IV. 

The following claims of the War Department against Italy are balances due 
for the cost of conunodities delivered to Italy, concerning which Conmiandatore 
Brofferio states that he has not sufiicient information to justify the inclusion 
of any particular amounts therefor in this agreement : 

Picric acid excess raw material cost .$319, 000 

Ammonium nitrate 156,6.56 

Overcoats 147, 789 

Dixie magnetos 47, 175 

Liberty motors 26,728 

Invoices therefor have been presented to the Italian ^Military Mission in the 
United States, but the War Department records show that payment thereof 
has not yet been made. Commandatore Brofferio has been informed that the 
invoice for Liberty motors, above referred to, has been paid. If they have not 
been paid the invoices for these commodities shall, in the usual course, be 
paid by the Italian Military Mission at Washington, D. C, as and when .such 
invoices shall have been duly audited by it. Directions to this effect shall be 
foi'warded to the Italian Military Mission immediately. 

The War Department has rendered to the Italian Military Mission in the 
United States invoices in the svuu of one hundred eighty-four thousand eighty 
dollars ($184,080.00), for copper ingots shipped to Italy in connection with the 
electrification of the Modane Railway. These invoices liave not been paid. 
The question of who shall pay for that improvement is before the Supreme 
Interallied Authorities. This agreement shall not affect in any way the rights 
of Italy or the War Department in respect to payment for said copper. It is 
convenient that settlement for said copper shall await the decision of the 
Supreme War Council or other competent authority and be made in accordance 
therewith. 

V. 

It is understood and agreed that the figures herein above set forth in para- 
graphs 1 and 2 are based in part upon estimates and that this settlement is 
made arbitrarily in the interests of both Governments. No further accounting 
shall be retiuested by either in respect thereto, either as to salvage values or 
otherwise. All property, equipment, raw material, and finished products ac- 
quired by the United States in the transactions from which such claims arise 
shall be and remain the sole property of the United States. 



UNITED STATES LIQUIDATION COMMISSION. 
VI. 



185 



The purpose of this agreement is the cleterininatiou of the amounts now due 
from Italy in connection witli the supply of war materials requested in behalf 
of the Italian Army for the prosecution of the war. The question of 
whether payment of the amount of five million two hundred thousand dollars 
($5,200,000.00) set forth in paragraph 1 can be made by credits from the United 
States is solely within the jurisdiction of the Treasury Departments of the two 
countries. 

In witness whereof, the parties hereto have liereunto set their hands upon 
duplicate originals, the day and year first above written. 

(Signed) Federico Beofferio, 

Comm. Gr. Cr. Authorised Representative of the In- 
terministerial Committee of the Italian Government 
for the Readjustment of the Industries of War. 
(Signed) Chester W. Cuthell, 

Special Representative of the Secretary of War of the 
United States of America. 

By .loHN H. Ray, .Ir., Assistant. 



In presence of: 
(Signed) 
(Signed) 



F. C. Weems. 

F. ViMERCAETI. 



APPENDIX XXXV. 

(iENEKAL Settlement Between United States of America a.\u Kingdom of 
Italy. February 18, 1920. 



This contract entered into this ISth 
day of February, 1920, by and between 
the United States of America (herein- 
after called "America") acting through 
the United States Liquidation Com- 
mission — War Department, Edwin B. 
Parker, chairman (by Harry T. Klein, 
special representative), of the one part; 
and the Kingdom of Italy (hereinafter 
called "Italy"), acting through Gen- 
eral Angelo Modena for the Ministry 
of War, representing also the former 
ministry of arms and ammunitions, and 
the other ministries of the Kingdom of 
Italy, according to the delegation re- 
ceived from the council of ministers, 
of the other part, witnesseth : 

That, whereas, between the 6th day 
of April, 1917, and the 31st day of De- 
cember, 1919 (hereinafter designated 
war period), the War Department of 
the United States of America and the 
American Expeditionary Forces on the 
one part (hereinafter called War De- 



Col presente contratto stipulato 11 
16mo PVbbraio 1920 da e tra gli Stati 
Uniti di America (dora innanzi chis- 
mati "America") rappresentati dalla 
Connnissione di Liquidazione degli 
Stati Uniti, Dipartimento della Guerra, 
di cui e presidente il Sig. Edwin B. 
Parker, per mezzo del Sig. Harry T. 
Klein, " Delegato Speciale " da un 
lato, e il Regno d' Italia (d' ora in- 
nanzi chiamato "Italia"), rappresen- 
tato dal Generale Angelo Modena per 
il Ministero della Guerra, in rappre- 
sentanza anche dell' ex-]Ministero Armi 
e Munizioni e degli alti'i Ministeri del 
Regno d' Italia, giusta delegazione 
avuta dal Consiglio dei Ministri, dall' 
altro lato, si stipula : 

Considerato che tra il 6 Aprile 1917 
e il 31 Dicembre 1919 (da qui innanzi 
chiamato " Periodo di guerra") il Di- 
partimento della Guerra degli Stati 
Uniti di America e le Forze Spedizio- 
narie Americano da un lato (di qui 
innanzi chiamati " Dipartimento della 



186 



UNITED STATES LIQUIDATION COMMISSION. 



partiiient) and the Ministry of War, 
tlie former ministry of arms and am- 
munition of Italy, and the Italian 
Army (hereinafter called Ministry of 
^^':li•) on the other part, had numerous 
transactions between each other con- 
nected with or incidental to the con- 
duct of the war in the prosecution of 
which the parties were associated ; and 
Whereas America and Italy desire, 
with respect to such transactions as 
occurred in Fi-ance. Italy, and regions 
adjoiniiiiT Italy, to make a full, final, 
and complete settlement of all bills, ac- 
counts, claims, obligations, demands, 
rigiits, and causes of action of every 
nature whatsoever, whether growing 
out of the delivery of or contracts for 
the delivery of materials, supplies, or 
equipment ; or for services rendered 
or contracted to be rendered ; or for 
the occupation and use of all public 
properties of Italy, and all damai^es 
thereto : or otherwise, initiated, aris- 
ing or accruing during the said v.ar 
period, said settlement to be herein- 
after designated as general settlement ; 
and 

Whereas, the nulitary forces of 
America have, as incidental to or con- 
nected with the conduct of the war, oc- 
cupied and used real property, ap- 
propriated and used personal property, 
damaged real and personal property, 
and damaged individuals, resulting in 
their injury or death ; all of which said 
occupancies, appropriations, uses, and 
damages occurred during the said war 
period^and for which Italy has agreed 
to substitute herself for America and 
guarantee America against all such 
unsettled claims, for the consideration 
hereinafter set forth ; and 



Whereas, the parties hereto in ar- 
riving at such general settlement have 
agreed that in i-espect to the transac- 
tions aforesaid, there is due by Italy to 
America the sum of four million six 
hundred sixty-nine thousand nine hun- 
dred and seventy-four lire and seventy- 



(rueri-a") e il Ministero della Guerra, 
i' ex Ministero della Armi e Munizioni 
dell" Italia e I'Esercito Italiano (d' ora 
innanzi chiamati " Ministero della 
Guei'ia "') dair altro lato. eberro nu- 
meroso transasioni tra di loro, con- 
nesse o dipendenti dalla condotta della 
guerra. nella prosecuzione della quale 
le due parti erano associate; o 

Considerato che 1' America e 1' Italia 
desiderano, rispetto a tutte le transa- 
zioni che ebbero luego in Francia, 
Italia e regioni finitime all' Italia, di 
fniv un totale, finale e completo rego- 
Inniento di ttitte le fatture, conti. le- 
clami, obbligazioni, demande, diritti e 
cause di azione, di ogni e qualziasl 
natura, sia sergenti dalla consegna o da 
contra tti per la consegna di materiale, 
forniture o equipaggiamento, a per 
spr\izi resi o contrattati perche fos- 
ser(< resi. o per la occupazione e uso 
dl ogni propriety pubblica d' Italia, 
e tntti i danni inerenti, sia in altro 
modo ; iniziati, sorti o derivanti du- 
rante il detto " Periodo di guerra," 
dovendo tale regolamento d' ora in- 
nanzi essere designate come " Regola- 
mento Generale " ; o 

Considerato che le forze militari 
deir America hanno in conseguenza e 
in dipendenza della condotta della 
guerra occupato o usato proprieta 
imniobiiiari, preso possesso e usato di 
projjrieta mobiliari, dannoggiato pro- 
prieta imn!o])ilinri e mobiliari, e cau- 
sato danni a individui. che risultarouo 
in ferite o morte dei niedesimi ; tutte 
le quali occupazioni, preso dl possesso. 
usi e danni sono accorsi durante il 
detto " Periodo di guerra", e per cui 1' 
Italia ha conveiuito di sostituirsi all' 
America a garantire la stessa contro 
tutti i detti non ancora regolati re- 
clami alle condizioni qui sotto indi- 
cate; e 

Considerato che le parti in parola 
nel giungere a tale Ilegolamento gene- 
rale hanno convenuto che per rispetto 
alle transazioni s^mmenzionate risulta 
un debito dell' Italia verso 1' America 
di (puittro milioni sei cento sessanta 
nove inila nove cento settanta quattro 



UNITED STATES LIQUIDATION COMMISSION". 



187 



one centimes (lire 4.669,974.71), and 
tliere is due by America to Italy the 
sum of thirty-three million seven hun- 
dred seventy-six thousand five hundred 
twenty-one lire and forty-four centimes 
(lire 33,776.521.44). and that there is 
therefore a net balance of twenty-nine 
million one hundred six thousand five 
hundred forty-six lire and seventy-five 
centimes (lire 29,106,546.75) due Italy, 
accordii!g to the liquidation account at- 
tached to this agreement. 

A^oit\ therefore, in consideration of 
the pi'emises, it is mutually agreed be- 
tween the parties hereto as follows : 

Article 1. America agrees to pay in 
cash to Italy through the Ministry of 
War the said bahuice of twenty-nine 
million one hundred six thousand five 
hundred forty-six lire and seventy-five 
centimes (lire 29.106,546.75) witlun a 
month from the signature of the pres- 
ent agreement. 

Article 2. Italy does hereby fully, 
completely and in all thing.'* release 
and discharge America, and America 
does hereby fully, completely and in all 
things, release, and discharge Italy, in 
respect to all of said transactions afore- 
said arising in France, Italy and 
regions adjoining Italy, from all bills, 
accounts, claims, obligations, demands, 
rights, causes of action, suits, and con- 
troversies of every nature whatsoever, 
which either party now has against the 
other, or which may hereafter arise, 
whether by reason of or in any wise 
incident to or growing out of the de- 
livery of or contracts for the delivery 
of materials, supplies, or equipment, or 
for services rendered or contracted to 
be rendered, or for the occupation and 
use of all public properties of Italy, 
and damages thereto, or otherwise, 
initiated, arising, or accruing in France, 
Italy, and regions adjoining Italy dur- 
ing the said war period between the 
War Department on the one part and 
the Mini.stry of War, repre.senting also 
the other ministries, on tlie other. 



lire e settanta uno centesimi (lire 
4,669,974.71) ed un del>ito dell' America 
a favore dell' Italia di trenta tre niilioni 
sette cento settanta sei niila cincjiie 
cento venti una lire e quaranta quat- 
tro centesinn' (33.776.521.44) ; e percio 
una difterenza attlva a favore dell' 
Italia di venti nove niilioni cento sei 
mila cinque cento quaranta sei lire e 
settanta cinque centesimi (lire 29.106,- 
546.75) come da conto di liquidazione 
che si allega al pvesente contratto. 

In vista di quanto sopra si e con- 
venuto tra le due parti cpianto segue: 

Akticolo 1. L' America s" inipegna 
di pagare in contanti all' Italia e per 
essa al Ministero della Ouen-a la detta 
somma di venti n(tve niilioni cento sei 
mila cinqtie cento quaranta sei lire e 
settanta cinque centesimi (lire 29.106.- 
546.75) enti'e an mese dalla firnia 
della presente Couvenzione. 

Articolo 2. Ij'Italia col presente con- 
trato totalmente e completamente c 
sotto ogni punto di vista libei'a v 
scarica 1' America, e l' America co! 
presente contratto totalmente e coiii- 
plttamente e sotto ogni punto di vista 
libera e scarica 1' Italia, per rispetto a 
tutte le stunmenzionate transazioni 
che ebbero luogo in Francia. Italia e 
region! fiinitime all' Italia, da ogni fat- 
tura. conto, reclaino, olibligazione. do- 
manda, diritto. causa di azit)ne. pro- 
ces.so (J controversio di qualsiasi natura 
che ognuna delle due parti ha ora 
contro r altra. o ciic jiuo sorgere in 
seguito : sia cnusati. sia in qualsivo- 
glia modo risultanti o derivanti dalia 
consegna o dai contratti di consegna 
di materiali, furniture o equipaggia- 
menti, o da servizi resi o contrattati 
perche fossei'o resi, o dall" occupa- 
zione e uso di qualsiasi ptibblica pro- 
priety in Italia, e danni inerenti, o 
in altro inodo : iniziati, sorti o deri- 
vanti in Francia. Italia e regioni fini- 
tinie air Italia durante il detto Perir- 
do di guerra tra il Dip;irtimento delhi 
Guerra da un lato e il ^Ministero della 
Guerra, in rappresentanza anche degli 
altri ]Ministeri, dall" altro lato. 



188 



UNITED STATES LIQUIDATION COMMISSION. 



Article 8. Italy does liereliy agree 
to incleinnify and save America harm- 
less, and does hereliy fully, completely, 
and in all things release and discharge 
America from all claims, demands, ob- 
ligaticms, liabilities, suits, and contro- 
versies of every kind and nature aris- 
ing in France, Italy, and regions ad- 
joining Italy during said war jieriod, 
wliich any inhabitant of Italy or any 
jierson suliject to the sovereignty of 
Italy, or any organization, association, 
or corporation, c<mimuMe, or Province 
of Italy may non- have; or which may 
!>ereafter accrue, for damage to. use, 
rccupation, or lo.ss of property, real or 
personal ; or injuries to or death of 
persons, c:tused by or resulting from 
acts or omissions of the American Mili- 
tary Forces, or of anyone connected 
therewith, and which have not already 
been paid directly by America. 

Article 4. Nothing hereinbefore con- 
tained shall be held or construed to in 
any wise annul, alter, modify, or affect 
the formal obligations of Italy held by 
Amei-ica ( which do not concern the 
items included in the accounts hereto 
unnexed) ; or the obligations of either 
j-arty arising out of contracts, agree- 
ments, or arrangements entered into be- 
tween said parties in America, or to in 
:uiy wise affect any matters now pend- 
ing in America between said parties. 
This agreement does not in any way 
alter or affect the contract made be- 
tween Federico Brofferio, representing 
Italy, and Chester W. Cuthell, repre- 
senting AmeriCii, dated August 13, 1919, 
nor the contract made between Comm. 
Arrigo Oullini, representing Italy, and 
Major W. S. Franklin, representing 
An)erica, dated March 16, 1919, relative 
to the transportation of American 
troops from Italy and Marseille to 
America. The claim of America 
against Italy for copper ingots shipped 
to Italy for the electrification of the 
]Modane Railroad is not covered by 
this general settlement, said claim be- 
i!!g held in abeyance pending a de- 
cision of the Inter-Allied Reparation 



Articolo III. L'ltalia col presente 
contratto si obbliga a sostituirsi all' 
America garantendola totalmente, com- 
plettunento e sotto ogni punto di vista 
Ilvoi-andola e scaricandola riguardo a 
tutti i i-eclami, demande, obbligazioni, 
(leliiti. processi e controver.sia di ogni 
genero e natura sorgenti in Francia, 
Italia e regioni tinitinie all' Italia du- 
rante il detto Periodo di guerra, die 
qualunque abitante d' Italia, o qualun- 
Que persona soggetta alia soln-anita 
d' Italia, o qualunque organizzazione, 
associazione, corporazione, Comune o 
Provincia d' Italia sellevi o possa solle- 
vare piu tardi per danni. iiso, occupa- 
zione o perdita di proprieta iminobi- 
liare, o mobiliare o ferite o morte di 
persone causate o risultanti da atti o 
oraissioni delle forzo militari ameri- 
cane o di chiunque connesso colle 
medesime, che non siano gia stati pa- 
gati direttamente dall' America. 

Articolo IV. Nulla di quanto e con- 
tenuto nol presente contratto dovra es- 
sere ritenuto o interpretato por aiinul- 
lare, alterare, moditicare o influire in 
alcun modo sulle obbligazioni formali 
deir Italia nelle mani dell' America 
(che non riguardino le partite comprose 
nel conto allegato) o sulle obbligazioni 
di anibo le parte sorgenti da contratti, 
accord! o regolamenti stipulati tra le 
due parti in America; o por esercitare 
qualsiasi eftetto sulle question! ora 
pendent! in America tra le due parti 
summenzionate. Questa convenzione 
non riguarda o altera in alcun modo 
11 contratto stipulate tra il Sr. Fede- 
rico Brofferio in rappresentanza dell' 
Italia e il Sr. Chester W. Cuthell in 
rappresentanza dell' America, in data 
13 Agosto 1919, e nemmano quelle 
stipulato fra il Sr. Connn. Arrigo Gul- 
lini in rappresentanza dell' Italia e il 
Sr. Maggiore W. S. Franklin in rap- 
presentanza deir America, in data 16 
Marzo 1919, relativo al trasporto delle 
truppe americane dall' Italia e da 
Marsiglia in America. II reclame dell' 
America contro l'ltalia per verghe di 
rame spedite in Italia per I'elettrifi- 
cazione della ferrovia di Modane non 



UNITED STATES LIQUIDATIOlSr COMMISSIOK". 



189 



Commission on tlie qnestion as to who 
shonld pay for said improvement. 



Article 5. Tliis contract shall not 
be construed to i-elate to or in any- 
wise affect transactions pertaining to 
any department or departments, 
aueiicy or agencies, of the United 
States of America other than said 
War Department, and all of the 
agencies of said War Department and 
the Amei'ican Armv and all of its 
braiiclies and aaencies. 



In witness whereof on the day and 
year first above written this contract 
has been executed in four parts, each 
having the full force and etfect of an 
original, by America acting through 
the United States Liquidation Com- 
mission — War Department. Edwin B. 
Parker, chairman (by Harry T. Klein, 
special representative), and by Italy. 
acting throiigh (4enei'al Angelo Mo- 
dena. for the ilinistry of War. and 
also for the former ministry of arms 
and anummitiou and the other minis- 
tries. 

United States of America. 
For United states Liquidation 
Commission — War Department. 
Edivin B. Parker, Chairman. 

By Harry T. Klein. 

Sped a 1 Represen tati re. 
Kingdom of Italy. 

For the Ministry of War and 
also Representing tiie Other 
Ministries. 
By Axoei.o IModena, 

Maioi- General. 



e coperto dal presente Regolamento 
Generale tale reclamo dovendo essere 
tenuto in sospezo in attesa di una de- 
cisione della Commissione interalleata 
delle riparazioni suUa questione; Chi 
deve pagare per tale miglioramento. 

Articolo V. Questo contratto non 
potra essere interpretato come rife- 
rentesi o in qualsiasi modo riguardante 
transazioni concernenti qnalsia.si Di- 
partiniento o Dipartimenti. Rappre- 
sentanza o Kappresentanze degli Stati 
Uniti di America all' infuori del detto 
Dipartimento della Gnerra o tutte le 
Kappresentanze del modesimo Diparti- 
mento della Gnerra e I'Esercito Ameri- 
cano e tutti i suoi rami e Kappresen- 
tanze. 

In testimonianza di quanto sopra, 
nel giorno o anno scritti in principio, 
it presente contratto e stato redatto in 
qnattro copie. ciascuha avente la 
plena forza e I'effetto di un originale, 
dair America, rappresentata dalla 
Connnissione di Liquidazione degli 
Stati Uniti. Dipartimento della Gner- 
ra, di cui e Presidente 11 Sr. Edwin B. 
Parker, in persona del Sr. Harry T. 
Klein. Delegato Speciale. e dall' Italia, 
rappresentata dal Generale Angel" 
Modena. pel Ministeru della Gnerra e 
anche per V ex-Ministero Armi e Mu- 
nizioni e per gli altri Ministeri. 
Stati Uniti di America, 
Par la Conrnrissione de Li(}iiid<t- 
sione degli Stati Uniti — Departi- 
mento della Gnerra. Ed win B. 
Parker, Presidente. 
Per Harry T. Klein. 

Delagato Speeiale. 
Regno d'Italia. 
Pel Ministero della Gnerra in rap- 
presentanza anche degli altri }[i- 
nisteri. 
Per Angelo Modena. 

Magoiorc Generate. 



190 



UNITED STATES LIQUIDATION COMMISSION. 



Statement of uccuunts of the Italian and Aincricaa Uocernnicnts for general 

settlement. 



ITALIAN ACCOUNTS. 



AMERICAN ACCOUNTS. 



Railway tiansportation ac- 
count 

M i s c e 11a - 

n e o u s 

material 

< to have 

been 

paid for 

in cash) L3, 823, 429f50 
Less bills 

tor Sig- 

n a 1 

C o r p s 

for labor 

and ma- 

t erial, 

d i s a 1 - 

lowed __ 8,076.47 



Lire. 
1, 166, 512. 40 



l.ite. 



Q. M-. Corps bills, $41,374.04 ; 
rate of exchange 13 lire 
to $1 537, 862. 52 

Medical Corps bills, fr. 
1,514,191.71 ; rate of ex- 
change 1.20 lire to 1 fr__ 1,817,030.05 

Transportation Corps bills 2, 128, 700. 00 

Q. M. Corps bills against 
Italian officers' mess, Lyon, 
France 77,497.14 

Q. M. Corps bills for miscel- 
laneous material 108, 885. 00 



Subsistence stores and 
olh(T material to have 
l)een returned in kind, 
$382, 802. 03 ; rate of ex- 
change 13 lire to $1 

Aviation account (see 
proces verbal of Decem- 
ber 10, 1919) 

Artillery account, gold fr. 
2, 705, 398. 40 ; rate of 
exchange 2.0526 lire to 
1 gold franc 

R. R. & C. account 

American Relief Adminis- 
tration account 



3, 815, 353. 03 

4, 976, 426. 39 
18, 073, 348. 17 



5, 553, 100. 75 
180, 000. 00 

11, 780. 70 



Gross amount 33,776,521.44 



Gross amount 4. 669, 974. 71 



RECAPITULATION. 

Lire. 

Gross auioiiiit due Italy 33,776,521.44 

(iross amount due America 4,669,974.71 

Net amount due Italy , 29, 106. .546. 75 

This statement is in absolute agreement with the statement presented by the Italian 
office charged with making general settlement for Italy. 

(Signed) Victor A. Libretti, 

2nd Lieut., Q. M. Corps, U. S. .inny. 

Washington, D. C. May 25th, 1020. 
^Memorandum to be attached to all copies of statement of accounts of Italian 
and American Governments for general settlement, being basis of the general 
settlement of February 18th. 1920 (to be attached to all copies of contract in 
files). 

1. In the column of credits to the American account in the attached gen- 
eral statement of accounts of the Italian and American (xovernments, item 
number 1. entitled " Q. M. C. bills," amounting to .$41,374.04, should read, 
"American bills, in dollars." and includes the following: 

(1) Motor Transport Corps bills, in dollars, against the 

Italian (Government .$120. 35 

(2) Ordnance Corps bills, in dollars, against the Italian 

Government 3, 511. 35 

(3) Quartermaster Corps bills, in dollars, against the 

Italian Government 37. 742^ 34 

Total 41, 374. 04 



UNITED STATES LIQUIDATION COMMISSION. 191 

2. Item number 2, entitled " Medical Corps hills," amounting to frs. 1. 514,191. 71, 
should read. "American hills in francs," and includes the following: 

Frs. 

(1) Medical Corps bills in francs against the Italian 

Government 264, 279. r.O 

(2) Ordnance Corps bills in francs against the 

Italian Government 1,249,702.21 

(3) Quartermaster Corps bills in francs against the 

Italian Government 210.00 

Total 1, 514, 191. 71 

3. Item ninnber 3, entitled " Tran.sportation Corps bills," amounting to lire 
2,128,700.00, should read, " Motor Transport Corps bills." 

Louis Broido. 



APPENDIX XXXVI. 

United States Liquidation Commission — Wak Department, 
statement of expenditures from date of organization, february 11, 1919, to 

MAY 31, 1920. 

Salaries of Commissioners $31,449.97 

Foreign per diem allowance of Commissioners 13,529.13 

Salaries of civilian employees 85,949.77 

Foreign per diem allowance of civilian employees 63, 419, 44 

Foreign per diem allowance and expenses of military personnel 15,046. 86 

Office supplies, printing, etc 1,701.72 

Loss on exchange 11. 706. 28 

Total 222, 803. 17 

o 



H 98 834 






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